2009 (12) TMI 889 - HC - VAT and Sales Tax

Whether the transactions involved are consignment sales? Held that - A reading of the order passed by the Tribunal would show that the assessee has produced records to show that the goods have been sent to the other State agents and commissions have been paid. The assessee also filed a declaration under form F. It is not the case of the Revenue that the information given under form F is not true. It is also seen that the agents have paid the local tax in the other State and the goods were neither manufactured according to the specifications of a particular goods nor they were meant for a particular customer. The assessee in the present case has produced all the material evidence to satisfy that the transactions were consignment sales. Non-production of the records as required by the assessing officer cannot be a ground to draw adverse inference against the assessee. Appeal dismissed.

Summary

Issues:
1. Disallowance of turnover treated as inter-State sale by assessing officer.
2. Rejection of appeal by Appellate Assistant Commissioner.
3. Tribunal allowing the appeal by holding transactions as consignment sales.
4. Revenue filing writ petition against Tribunal's order.

Analysis:
1. The assessing officer disallowed a turnover as inter-State sale due to lack of required documents and absence of clause for goods return in the agreement. The Appellate Assistant Commissioner upheld this decision.
2. The assessee appealed to the Tribunal, which allowed the appeal by considering evidence of goods sent to other State agents, commissions paid, and local sales tax paid in the other State. The Tribunal found rule 4(3)(a) not mandatory and lack of goods return clause not decisive in determining consignment sales.
3. The Revenue contended non-compliance with rule 4(3)(a), same amount received in transactions, and absence of goods return clause as evidence of inter-State sales. However, the Tribunal considered evidence like form F declaration, agent payments, and lack of specific customer requirements to support consignment sales.
4. The High Court dismissed the Revenue's writ petition, noting the Tribunal's detailed analysis and conclusion based on available evidence, including the non-mandatory nature of rule 4(3)(a) requirements and absence of goods return clause not being determinative of inter-State sales. The Court found no grounds for interference and upheld the Tribunal's decision, ultimately dismissing the writ petition and connected miscellaneous petition without costs.