2015 (12) TMI 1632 - HC - VAT and Sales Tax

Whether the Petitioner is not entitled to exemption from tax under Section 6(2) of the Central Sales Tax Act, 1956 on the second inter state sales of goods, since they have failed to prove by producing material evidences? - petitioners claim that there is error apparent committed by the Respondents in not considering the necessary documents filed by the Petitioner, particularly, non consideration of the Form-C declarations - respondents say that after proper inspection and considering the documents available, the impugned order has been passed. Held that - the Petitioner can be afforded one more opportunity to submit the documentary evidence to substantiate their case and on such evidence being filed, the same would be considered and appropriate orders would be passed - petition allowed by way of remand.

Issues:
1. Assessment orders dated 15.02.2005 for CST and TNGST assessments challenged in Writ Petition.
2. Claim of exemption under Section 6(2) of the Central Sales Tax Act, 1956.
3. Territorial jurisdiction to impose Central Sales Tax in Tamil Nadu.
4. Non-consideration of Form-C declarations by the assessing officer.
5. Opportunity for the Petitioner to submit documentary evidence.

Analysis:
1. The Petitioner, a partnership firm, challenged assessment orders for CST and TNGST assessments for the years 2002-2003 and 2003-2004. The Petitioner claimed exemption under Section 6(2) of the Central Sales Tax Act, 1956 for interstate sales of chemicals. The Respondents demanded tax and penalty, contending that the Petitioner failed to provide sufficient evidence to support their exemption claim. The Petitioner argued that they were entitled to exemption and had submitted necessary forms and certificates.

2. The Respondents, based on their records and verification, concluded that the Petitioner's claim of exemption as sales in transit under Section 6(2) of the CST Act could not be allowed. They argued that the transactions fell under Section 3(a) of the CST Act as goods were moved between states and the turnover under sale in transit was not properly reported. The Respondents maintained that the profit margin in a transaction does not affect the nature of the sale.

3. The Petitioner contended that the assessing officer in Tamil Nadu lacked territorial jurisdiction to impose Central Sales Tax on goods transmitted from Kerala to other states. They argued that the Respondents did not consider the Form-C declarations provided, resulting in an incorrect tax rate application. The Petitioner also highlighted the lack of evidence or inquiries made by the assessing officer before issuing the impugned orders.

4. The Court considered the arguments presented by both parties. The Petitioner challenged the impugned order primarily on the grounds of the Respondents' failure to consider essential documents, particularly the Form-C declarations. The Respondents defended their decision, stating that the orders were passed after proper inspection and document review. However, the Respondents agreed to allow the Petitioner another opportunity to submit the necessary documentary evidence for re-assessment.

5. In light of the submissions made, the Court set aside the impugned orders and remitted the matter back to the Respondents for fresh assessment. The Petitioner was granted two weeks to produce all required documents, which would be duly considered for passing appropriate orders. The Court emphasized affording the Petitioner a personal hearing and instructed the Respondents to make a decision within six weeks following the submission of additional evidence.

This detailed analysis covers the various issues raised in the legal judgment, providing a comprehensive overview of the case and the Court's decision.

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