2009 (12) TMI 890 - HC - VAT and Sales Tax

Rejection of the form F declaration - Held that - In the case on hand, the assessee has produced all the relevant documents sought for by the authorities. Therefore, the finding given by the Joint Commissioner that there was an implied agreement between the assessee and the ultimate purchaser, which is the Kerala State Transport Corporation, is not supported by any material evidence available on record. Moreover, it is not in dispute that for the assessment years 1989-90 and 1992-93, the Joint Commissioner has accepted the reply filed by the assessee and dropped the proposal to revise the order of the first appellate authority. Form F declaration to be accepted. Appeal allowed

Summary

Issues:
Challenge to order of Joint Commissioner for assessment year 1991-92 regarding exemption claimed by assessee for consignment sale.

Analysis:
The assessee, a dealer in coriander seeds, claimed exemption for a sum of Rs. 35,77,232.77 for the assessment year 1991-92, which was rejected by the assessing officer without providing reasons. The Appellate Assistant Commissioner allowed the appeal, but the Joint Commissioner set aside this decision based on surmises and without concrete evidence. The Joint Commissioner presumed direct sales between the assessee and Kerala State Transport Corporation, which was unfounded. The appellate authority found no material evidence supporting this presumption and reinstated the order in favor of the assessee.

The Joint Commissioner's decision lacked evidentiary support and was inconsistent with his actions in previous assessment years where similar transactions were accepted. The court held that the rejection of exemption by the assessing officer without valid reasons and the Joint Commissioner's reliance on assumptions were unjustified. The assessee had provided all relevant documents, disproving the implied agreement alleged by the Joint Commissioner. The court concluded that the Joint Commissioner's order was unfounded and reinstated the decision of the appellate authority.

In summary, the court set aside the Joint Commissioner's order and restored the decision of the appellate authority in favor of the assessee for the assessment year 1991-92. The court emphasized the importance of concrete evidence and valid reasons in tax assessments, highlighting the need for fair and evidence-based decision-making in such matters.