2013 (5) TMI 370 - HC - VAT and Sales Tax

Inter state sale or Intra state sale - stock transfer / consignment sales - The assesse main contention is that its only a consignment sale which is eligible for exemption. The grievance of the department is that the goods were supplied directly from the purchaser to the other State and therefore, it can be only treated as of other State sales as the goods never reached the agents place and the goods were sent through the same lorry directly to the buyer. Therefore, the exemption which was originally granted by the assessing authority way back in the year 1994, was rightly sought to be withdrawn subsequent to the inspection according to the department. Held that It is settled by Supreme Court that once form F has been accepted and an assessment has been made on the basis of form F declaration filed by the assessee, revision of assessment cannot be made unless or otherwise the assessing authority has recorded a finding that assessment has been completed by fraud, misrepresentation or collusion. Useful reference can be had to the judgment of the Supreme Court in the case of Ashok Leyland Ltd., v. State of Tamil Nadu reported in 2004 (1) TMI 365 - SUPREME COURT OF INDIA . Discovery of new materials although may form a ground, it, by itself, would not be a ground for reopening of proceedings unless such discovery indicates a jurisdictional error. - do not find any reason to interfere with the reasoned order of the Tribunal which has rightly held that the exemption originally granted was correct. Hence, the writ petition is dismissed. - Decided against the revenue.

Summary

Issues:
1. Validity of the order passed by the Tamil Nadu Sales Tax Appellate Tribunal.
2. Disallowance of exemption on consignment sales.
3. Treatment of sales as direct inter-State sales.
4. Consideration of commission charges and freight payment for exemption.
5. Applicability of previous legal judgments on the case.

Issue 1: The State challenged the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) in a Writ Petition, alleging that the Tribunal erred in quashing the assessment order. The State contended that the Tribunal failed to consider the validity of disallowing the claim of exemption on consignment sales and treating them as direct inter-State sales.

Issue 2: The dispute revolved around the disallowance of exemption on a turnover of Rs. 96,069 as consignment sales by the Deputy Commercial Tax Officer. The Tribunal allowed the appeal by the first respondent, a timber trader, based on the argument that the goods were directly sent to the ultimate buyer in the same lorry, supporting the claim of consignment sale. The Tribunal was criticized for accepting the explanation without sufficient evidence regarding sales to third parties pending transport.

Issue 3: The State contended that the goods were supplied directly to another State, indicating direct inter-State sales, and sought to withdraw the exemption granted in 1994. The State argued that the delivery note mentioned the agent's name and commission paid, supporting the consignment sale claim. The Tribunal, however, emphasized that the agent bore transport charges and commission, as verified during the original exemption grant.

Issue 4: The Tribunal's decision was supported by legal precedents, including a Supreme Court judgment emphasizing that once a declaration is accepted and acted upon by the Revenue, assessment cannot be reopened unless there is fraud, misrepresentation, or collusion. The Tribunal's conclusion that the exemption was correctly granted was upheld, citing the legal principle that assessment based on accepted declarations cannot be disturbed without valid grounds.

Issue 5: The judgment referenced various legal cases, including the Ashok Leyland case, to support the Tribunal's decision regarding the acceptance of declarations and the conclusive nature of assessments based on such declarations. The Tribunal's order was upheld based on the legal principles established in previous judgments, leading to the dismissal of the Writ Petition and the closure of the connected miscellaneous petition without costs.