2009 (11) TMI 827 - HC - VAT and Sales Tax

Vires of section 6A - form F - deemed inter-State sale - claim of petitioner is that the assessee should not be held liable for want of form F if on the basis of other evidence in this regard he is in a position to prove that the transaction in question is not inter-State sale but it is only a transaction of consignment - Held that - this court is of the view that it is open for the petitioner to agitate this issue before the pending proceedings and establish its claim in absence of form F while leading other evidence to the effect that the transaction in question is not an inter-State sale but it is merely a consignment - petition allowed by way of remand.

Summary

Issues:
Challenge to the vires of section 6A of the Central Sales Tax Act, 1956 regarding the obligation to produce valid form F and the deeming fiction of inter-State sale creation. Violation of articles 14 and 19(1)(g) of the Constitution of India.

Analysis:

The petitioner challenged the vires of section 6A of the Central Sales Tax Act, 1956, which mandated dealers to produce valid form F from the prescribed authority. Failure to do so resulted in a deeming fiction of an inter-State sale. The petitioner sought to quash this provision, alleging it violated articles 14 and 19(1)(g) of the Constitution of India. The petitioner contended that prior to the amendment in section 6A, dealers could prove consignment transactions without producing form F. However, the amendment restricted this option, leading to the current challenge.

During the proceedings, the petitioner's counsel referred to the Supreme Court's decision in Ambica Steels Ltd. v. State of U. P., highlighting that in cases where form F was not issued by the State, assessing officers could reassess transactions based on other evidence. The counsel argued that dealers should not be penalized for lack of form F if they could demonstrate through alternative evidence that the transaction was not an inter-State sale but a consignment transaction. This argument emphasized the importance of considering circumstances beyond the strict requirement of form F.

The court noted that the petitioner's appeal had already been dismissed, and the matter had been further complicated by the petitioner's subsequent review petition and appeal to the Central Sales Tax Appellate Authority. As a result, the court declined to entertain the current petition. However, in line with the precedent set by the Supreme Court in Ambica Steels Ltd. v. State of U.P., the court acknowledged the petitioner's right to address the issue in the ongoing proceedings. The court emphasized the petitioner's opportunity to present evidence supporting the contention that the transaction was a consignment, not an inter-State sale, even without form F.

In conclusion, the court disposed of the petition with the observation that the petitioner could pursue the issue in the existing proceedings. The judgment highlighted the importance of allowing the petitioner to establish the nature of the transaction through alternative evidence, as recognized in the precedent cited during the proceedings.