2012 (7) TMI 853 - HC - VAT and Sales Tax

Whether the finding of the Tribunal that the transport of goods was in the inter-State sale and not a branch transfer? Whether the Tribunal was grossly erred in assessing the material on record and given perverse finding while setting aside the levy of penalty? Held that - The assessment of documentary materials by the Tribunal is essentially a question of fact. It is evident that the assessee has branch outlets in Bangalore. The assessee has been transporting the petroleum products to its branch outlets from Chennai regularly. The assessee is not permitted to sell the petroleum products from outlet other than the branch outlets. Therefore, the finding recorded by the Tribunal is sound and proper and that does not call for interference. The substantial question of law is against the petitioner. Accordingly, the petition is dismissed.

Summary

Issues:
Interpretation of transaction as inter-State sale or branch transfer; Validity of penalty imposed by check-post authorities.

Analysis:
The case involved determining whether the transportation of goods was an inter-State sale or a branch transfer, leading to the imposition of a penalty by the check-post authorities. The assessee, a registered dealer in petroleum products, had several outlets in Bangalore and was transporting goods from Chennai to Bangalore. The check-post authorities intercepted the vehicles and found handwritten particulars in the documents, leading to the imposition of a penalty. The Tribunal, after considering the documentary evidence, concluded that the transaction was a branch transfer and not an inter-State sale. The Tribunal highlighted that the documents and addresses matched, and the appellant's explanations were reasonable, supported by the circumstances of power failure. The Tribunal also cited legal precedents emphasizing the genuineness of transactions and the need to avoid technicalities in assessments.

The Tribunal's assessment of the documentary evidence was considered a question of fact. The Tribunal's findings were based on the regular transportation of goods by the assessee to its branch outlets in Bangalore, in line with the business operations restricting sales to branch outlets only. Therefore, the High Court upheld the Tribunal's decision, deeming it appropriate and declined to interfere. The substantial question of law raised by the petitioner was dismissed, leading to the rejection of the petition. Furthermore, the High Court directed the refund of the penalty imposed on the respondent, indicating a favorable outcome for the assessee in the case.