1997 (9) TMI 593 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether goods despatched to godowns at Thane and Bombay constitute inter-State sales.
2. Imposition of penalty on the assessee for goods despatched to godowns.
3. Interpretation of lorry receipts and delivery receipts.
4. Assessment of turnover for goods despatched to Berlia Chemicals.
5. Determination of liability for Central sales tax.

Analysis:
1. The High Court addressed the issue of whether goods despatched by the assessee to its godowns at Thane and Bombay qualified as inter-State sales. The Tribunal concluded that the goods moved to these godowns were inter-State sales. The assessee argued that the despatches were not inter-State sales but were made to itself. The Court examined various documents presented by the assessee, including orders from customers, to support its contention that the goods were not sold by way of inter-State sales.

2. The Court scrutinized the lorry receipts and delivery receipts to determine the nature of the transactions. The Tribunal heavily relied on the instructions recorded on the lorry receipts to establish inter-State sales. However, the Court found that the mere mention of delivery instructions did not conclusively prove inter-State sales. The Court highlighted that the burden of proof lies on the authorities to establish the sale transaction with certainty, especially when documents maintained by the assessee contradicted the Tribunal's assertions.

3. Regarding goods despatched to Berlia Chemicals, the Court upheld the Tribunal's decision that these despatches constituted inter-State sales. The Court noted that the agreement with the consignment agent indicated the agent's role in storing and selling goods on behalf of the assessee in different locations. The Court disagreed with the assessee's claim that despatches to the consignment agent did not result in inter-State sales.

4. The Court concluded that the Tribunal's findings were not adequately supported by the evidence and documents presented. It emphasized that the Tribunal's reliance on certain instructions in the lorry receipts to impose tax liability was unfounded. The Court overturned the Tribunal's decision and directed the assessing officer to compute the turnover for goods despatched to Berlia Chemicals, holding the assessee liable to pay Central sales tax on that turnover.

5. In summary, the High Court partially allowed the revision petitions, setting aside the tax levy on goods despatched to the Thane godown but upholding the tax liability for goods sent to Berlia Chemicals. The Court's detailed analysis focused on the interpretation of documents, burden of proof, and the determination of inter-State sales, ultimately clarifying the tax implications for the assessee's transactions.