1996 (6) TMI 336 - AT - VAT and Sales Tax

Issues Involved:
1. Justification of the imposition of penalty under section 16(1)(i) of the RST Act.
2. Admissibility of documentary evidence at the stage of first appeal.
3. Determination of whether the sales in question were covered by section 5(3) of the CST Act.

Detailed Analysis:

1. Justification of the Imposition of Penalty under Section 16(1)(i) of the RST Act:
The Tribunal examined whether the imposition of penalties under section 16(1)(i) of the RST Act was justified. The relevant portion of section 16(1)(i) states that penalties can be imposed if any person "has concealed any transaction of sale or purchase from his books of accounts or registers." The Tribunal found that all transactions were duly recorded in the petitioner's books and were extracted by the Assistant Commissioner (Anti-Evasion) from these records. Therefore, the Tribunal concluded that no concealment occurred, and hence, no penalty was leviable under section 16(1)(i). The penalties of Rs. 2,29,838 and Rs. 37,602 were set aside.

2. Admissibility of Documentary Evidence at the Stage of First Appeal:
The Tribunal addressed the issue concerning the admissibility of additional documentary evidence at the first appellate stage. The Board had previously remanded the matter for a de novo decision, arguing that the assessing authority should have been given an opportunity to rebut the additional evidence. The Tribunal clarified that the assessing authority, in its judicial capacity, cannot be considered the opposite side before the appellate authority. The Deputy Commissioner, as the appellate authority, had the power to admit additional evidence without requiring the assessing authority to rebut it. Therefore, the Tribunal held that the additional documentary evidence was admissible and the Deputy Commissioner was competent to adjudicate based on this evidence.

3. Determination of Whether the Sales Were Covered by Section 5(3) of the CST Act:
The Tribunal discussed whether the sales in question were covered by section 5(3) of the CST Act, which deems the last sale preceding the export as being in the course of export if it was made to comply with an agreement or order for export. The Tribunal cited the Supreme Court's interpretation in Mod. Serajuddin v. State of Orissa and Consolidated Coffee Ltd. v. Coffee Board, which clarified that only the penultimate sale preceding the export sale can be considered in the course of export. The Tribunal concluded that the petitioner's sales of sesame to dealers outside the State did not meet the criteria of section 5(3) of the CST Act, as there was no evidence of a prior agreement or order from a foreign buyer. Therefore, these sales were deemed inter-State sales and subject to purchase tax under section 5A of the RST Act.

The Tribunal also noted that the State Government had issued a notification exempting such purchases from tax if sold in the course of inter-State trade or commerce. Given that the petitioner did not charge or collect purchase tax and the goods were sold in inter-State trade, the Tribunal set aside the purchase tax, penalty, and interest related to these transactions. The petitioner was entitled to a refund with interest for any amounts deposited under these assessment orders.

Conclusion:
The Tribunal disposed of the revision petitions, setting aside the penalties and purchase tax, and ruled in favor of the petitioner, granting a refund with interest for the amounts deposited. No order as to costs was made.

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