2007 (7) TMI 579 - AT - Central Excise

Issues Involved:
1. Legitimacy of treating stock transfers as inter-State sales and levying Central sales tax.
2. Jurisdiction and authority of CSTAA to entertain appeals against orders of the highest appellate authority of a State.
3. Applicability and interpretation of amended sections 20 and 25 of the CST Act.
4. Maintainability of appeals before CSTAA against revisional orders of the Commissioner under the MPCT Act.
5. Procedural and jurisdictional implications of transferring appeals to the highest appellate authority of the State.

Detailed Analysis:

1. Legitimacy of Treating Stock Transfers as Inter-State Sales and Levying Central Sales Tax:
The appellant questioned the orders of the Madhya Pradesh sales tax authorities that treated stock transfers to branches in other States as inter-State sales and levied Central sales tax for the assessment years 1986-87 to 1990-91. The appellant initially challenged these assessments through revision petitions, which were rejected by the Additional Commissioner of Commercial Taxes. Subsequently, the appellant filed a writ petition in the Supreme Court, which was disposed of with directions to approach the appropriate forum within six weeks.

2. Jurisdiction and Authority of CSTAA to Entertain Appeals Against Orders of the Highest Appellate Authority of a State:
The Central Government brought into force Chapter VI of the CST Act, 1956, which established the CSTAA to deal with inter-State disputes arising from assessments made in more than one State. The appellant filed appeals to CSTAA on August 8, 2005. However, due to amendments in the CST Act effective from March 1, 2006, appeals could only be directed against orders of the highest appellate authority of a State.

3. Applicability and Interpretation of Amended Sections 20 and 25 of the CST Act:
The amended Section 20(1) of the CST Act specifies that appeals can be filed by any aggrieved person against orders of the highest appellate authority of a State. Section 25 mandates the transfer of pending appeals to the highest appellate authority of the concerned State unless they are against orders of the highest appellate authority itself. The CSTAA transferred the appellant's appeals to the Tribunal, the highest appellate authority of Madhya Pradesh, as per the amended Section 25.

4. Maintainability of Appeals Before CSTAA Against Revisional Orders of the Commissioner Under the MPCT Act:
The appellant contended that the appeal against the revisional order passed by the Commissioner under Section 62(1) of the MPCT Act does not lie to the Tribunal and is barred under the proviso to Section 61(2). However, the CSTAA held that the Tribunal must deal with the appeal on merits as per the mandate of Section 25(2) of the CST Act. The CSTAA concluded that the Tribunal is empowered to decide the appeal, notwithstanding the provisions of the State Act.

5. Procedural and Jurisdictional Implications of Transferring Appeals to the Highest Appellate Authority of the State:
The CSTAA emphasized that the Tribunal, as the highest appellate authority of the State, is statutorily bound to decide the appeal transferred to it. The Tribunal must proceed to deal with the appeal in the same manner as an appeal filed under the State sales tax law. The CSTAA clarified that the Tribunal must decide the appeal on merits unless the case falls within the proviso to Section 25(2), which requires forwarding the appeal to the first appellate authority if the appellant did not avail the opportunity of filing a first appeal.

Conclusion:
The CSTAA dismissed the application for recalling the order of transfer, holding that the transfer of appeal records to the Tribunal was in order. The Tribunal is directed to dispose of the appeals on merits, subject to the withdrawal of writ petitions filed by the appellant in the High Court of Madhya Pradesh or obtaining permission from the High Court to pursue the appeals before the Tribunal. The CSTAA also concluded that the original appeal filed under the pre-amended provisions of the CST Act was maintainable but stood transferred to the Madhya Pradesh Tribunal in view of the amended Section 25(2) of the CST Act.

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