1998 (12) TMI 597 - AT - VAT and Sales Tax

Summary

Issues:
1. Transfer of goods claimed as branch transfers vs. inter-State sales under CST Act.
2. Burden of proof on dealer to show movement of goods for branch transfers.
3. Validity of statements obtained from dealer's salesman.
4. Discrepancies in bills and lack of explanation.
5. Application of legal principles from Supreme Court rulings.
6. Dealer's failure to discharge burden of proof.

Analysis:
1. The judgment concerns an application for revision transferred to the Appellate Tribunal under the Rajasthan Taxation Tribunal Act, 1995, involving a dispute under the Central Sales Tax Act, 1956 (CST Act). The Tribunal reviewed an appeal against the Rajasthan Sales Tax Tribunal's decision, which accepted the dealer's claim of branch transfers over inter-State sales, leading to tax imposition, interest, and penalty under the CST Act and the Rajasthan Sales Tax Act, 1954.

2. The case involved a dealer registered under the CST and RST Acts, manufacturing goods in Rajasthan for branch transfers to its head office in Delhi. However, discrepancies arose during a vehicle check revealing potential inter-State sales misrepresented as branch transfers, leading to tax assessments and penalties by the assessing authority.

3. The Tribunal examined the validity of statements obtained from the dealer's salesman, crucial to determining the nature of transactions. It was noted that the burden of proof lies with the dealer to demonstrate goods movement for branch transfers, as per Section 6A of the CST Act, even when supported by declarations in form "F".

4. Various discrepancies in bills and lack of satisfactory explanations raised doubts on the dealer's claims. Unanswered questions regarding the presence of bills during transit and inconsistencies in bill dates remained unresolved, indicating potential misrepresentation of inter-State sales as branch transfers.

5. The Tribunal applied legal principles from Supreme Court rulings, emphasizing that if goods move directly from the factory to the purchaser in another state, it constitutes an inter-State sale, irrespective of billing processes involving the head office. The Tribunal cited relevant case laws to support the decision.

6. Ultimately, the Tribunal concluded that the dealer failed to discharge the burden of proof to show transactions were not liable for tax under the CST Act as inter-State sales. As a result, the Tribunal set aside the previous order, highlighting the dealer's inability to prove the transactions as branch transfers, leading to the imposition of taxes and penalties.

In conclusion, the Tribunal accepted the application for revision, overturning the previous order due to the dealer's failure to meet the burden of proof required by law.