2002 (6) TMI 569 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the orders were placed by UIL on HEI.
2. Whether the contract between HEI and UIL included provisions for market survey and forecasting of requirements.
3. Whether HEI manufactured and sent specific sizes and varieties of goods to UIL.
4. Whether sales to UIL should be treated as inter-State sales and taxed accordingly.
5. Whether the Tribunal had jurisdiction to direct the assessing authority to decide the nature of sales to parties other than UIL.

Detailed Analysis:

Issue 1: Orders Placed by UIL on HEI
The Tribunal examined the documents and materials on record and concluded that orders were indeed being placed by UIL on HEI. This was supported by the correspondence between the two parties, indicating that UIL placed orders specifying the quantities and varieties of goods required, which HEI complied with.

Issue 2: Market Survey and Forecasting Provisions
The Tribunal found no provision in the contract between HEI and UIL for market survey or forecasting of requirements. The plea of forecast was raised only after the Commercial Tax Officer sought to assess the sales to UIL as inter-State sales. The Tribunal noted that the terms "forecast" or "market survey" were not mentioned in the contract or correspondence.

Issue 3: Manufacturing and Sending Specific Goods
The Tribunal held that HEI manufactured goods of specific sizes and varieties as specified by UIL and sent them to UIL. This was evident from the orders placed and the compliance reports sent by HEI, indicating specific quantities and varieties of goods manufactured and dispatched.

Issue 4: Inter-State Sales
The Tribunal concluded that the sales made to UIL should be treated as inter-State sales and taxed accordingly. The movement of goods from HEI's factory to various locations was in pursuance of orders placed by UIL, thus constituting inter-State sales. The Tribunal's conclusion was based on the detailed examination of the agreements and correspondence between HEI and UIL.

Issue 5: Jurisdiction of the Tribunal
The Tribunal directed the assessing authority to decide whether sales made to parties other than UIL were branch transfers or inter-State sales. The Tribunal asserted its jurisdiction to provide such directions, as the nature of sales to other parties was not originally assessed by the Commercial Tax Officer.

Conclusion:
The Tribunal's findings were based on a thorough examination of the agreements and correspondence between HEI and UIL. The Tribunal upheld the assessing authority's decision that the disputed turnover related to inter-State sales, not branch transfers. The Tribunal's decision was supported by relevant case law, including judgments from the Supreme Court, which emphasized the importance of the contractual obligations and the movement of goods in determining the nature of sales. The revision petition was dismissed, affirming the concurrent findings of the lower authorities.