2009 (6) TMI 932 - AAAR - VAT and Sales Tax

Issues Involved:
1. Rejection of consignment sales claims.
2. Imposition of Central Sales Tax (CST).
3. Imposition of penalty under Section 7A of the APGST Act.

Detailed Analysis:

1. Rejection of Consignment Sales Claims:
The appellant, engaged in the manufacture and sale of vegetable oils, contested the rejection of their claims for consignment sales made through agents in other states, arguing these should not be included in the taxable turnover under the CST Act. The claims were rejected on various grounds, including the absence of F forms, non-existence of agents, invalid registration, and denial of transactions by agents. The Tribunal's order dated February 18, 2006, partly allowed the appeal, rejecting claims for a turnover of Rs. 4,69,45,683 due to conclusive departmental enquiries and insufficient documentary evidence.

Item-wise Analysis:
- S. No. 1: Vijay Laxmi Oil Products, Tumkur: Claim partly allowed for Rs. 5,09,048; remaining Rs. 6,87,257 rejected due to lack of supporting documents.
- S. Nos. 4, 5, 6, 7: Rejections overturned due to lack of detailed investigation reports.
- S. No. 9: Jai Baba Oil Mills, Gondiya: Rejection overturned due to contradictory findings.
- S. Nos. 11, 12, 13: Rejections overturned due to lack of substantial evidence and reliance on irrelevant periods.
- S. No. 14: Gayatri Trading Company, Khamgoan: Rejection overturned due to insufficient verification of agent's existence.
- S. Nos. 16, 17: Rejections upheld due to clear reports of non-existent or misrepresented agents.
- S. Nos. 18, 19: Rejections overturned due to lack of proper verification and reliance on irrelevant periods.
- S. Nos. 20, 21, 22, 23, 24, 25, 26, 27: Rejections upheld due to conclusive reports of non-existent agents or misrepresented registration numbers.
- S. Nos. 28, 29, 30: Rejections overturned due to incomplete or unverified statements from agents.
- S. Nos. 32, 33, 34: Rejections overturned due to lack of comprehensive investigation and incomplete statements.
- S. Nos. 35, 36: Rejections upheld due to clear reports of non-existent agents.
- S. Nos. 38, 39: Rejections overturned due to contradictory reports and lack of proper verification.
- S. Nos. 41, 42: Rejections overturned due to lack of clear evidence on agent's existence or closure.
- S. Nos. 43, 47, 48, 49: Rejections upheld due to clear reports of non-existent agents or denied transactions.
- S. Nos. 50, 51, 52, 53: Rejections overturned due to lack of comprehensive investigation and incomplete statements.
- S. Nos. 54, 55, 56, 57, 58, 59, 60: Rejections upheld due to clear reports of non-existent agents or misrepresented registration numbers.
- S. Nos. 61, 62: Rejections overturned due to lack of proper verification and reliance on irrelevant periods.

2. Imposition of Central Sales Tax (CST):
The CST was imposed on the disputed turnover of Rs. 4,69,45,683 at 10%, amounting to Rs. 46,94,568. The Tribunal confirmed the tax on Rs. 46,94,568 and remanded Rs. 3,82,44,636 for further investigation.

3. Imposition of Penalty under Section 7A of the APGST Act:
A penalty of Rs. 1,40,83,704, three times the tax amount, was imposed under Section 7A of the APGST Act for issuing false documents to support the claim. The Tribunal confirmed the penalty on the rejected turnover. The appellate authority upheld the penalty on the rejected turnover of Rs. 2,17,60,215, while setting aside the penalty on the turnover allowed on appeal.

Conclusion:
The appeals were partly allowed, with the rejection of claims upheld for a turnover of Rs. 2,17,60,215 and the penalty confirmed on this amount. The remaining turnover claims were allowed, and the penalty on these was set aside. The Department's appeal regarding the remanded penalty was dismissed.

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