2013 (7) TMI 594 - HC - VAT and Sales Tax

Penalty u/s 9(2) - Tribunal confirmed penalty - Held that - assessee had not objected to the finding of fact by the Tribunal that there were interpolations in the photocopy of the triplicate copy of the bills of entry and there were differences in the names found in the original bills of entry filed before the Customs Department and the photocopy of the the bill of entry filed before the Sales Tax Department. Thus with the finding of fact remaining intact, the question of law raised is a superfluous one - assessee had imported goods in bulk. When the assessee claims that high sea sales were effected in favour of three parties, with no appropriation definitely made on the bulk quantity imported, we do not find any justifiable ground to accept the plea of the assessee - Following decision of State of Tamil Nadu V. Kawarlal and co. 2011 (9) TMI 519 - Madras High Court - Decided against assessee.

Summary

Issues:
1. Interpretation of the term "bill of entry" as a document of title to goods for clearing goods under the Central Sales Tax Act.
2. Validity of high sea sales claim by the assessee for assessment years 1991-92 to 1994-95.
3. Discrepancies in bill of entry and sales documents leading to rejection of claim.
4. Assessment of penalty under relevant tax laws.
5. Disagreement between Assessing Officer, First Appellate Authority, and Tribunal on the high sea sales claim.

Issue 1: Interpretation of "bill of entry" as a document of title:
The High Court considered whether the Appellate Tribunal erred in construing the "bill of entry" as a document of title to goods for clearing them under the Central Sales Tax Act. The Tribunal found discrepancies in the names on original bills of entry and copies filed before the Revenue, leading to rejection of the claim. The Court cited a previous case to support its decision, emphasizing that the factual findings remained intact, making the legal question irrelevant. The Court dismissed the Tax Case (Revisions), upholding the Tribunal's decision against the assessee.

Issue 2: Validity of high sea sales claim:
The assessee, a dealer in plastic raw materials, claimed high sea sales for various assessment years. However, discrepancies were found in the invoices and bill of entry filings, leading to the rejection of the claim by the Assessing Officer. The First Appellate Authority initially allowed the claim, highlighting the practical impossibility of making endorsements on the document of title during high sea sales. The Tribunal, on the other hand, supported the Revenue's contention, emphasizing the discrepancies in bill filings and import details. The Court ultimately dismissed the assessee's claim, noting the lack of justification for multiple high sea sales on bulk imports.

Issue 3: Discrepancies in bill of entry and sales documents:
The Assessing Officer rejected the high sea sales claim due to discrepancies between original bill of entry details and copies filed with the Revenue. The Tribunal found interpolations in the bill of entry copies, indicating possible false claims by the assessee. The Court upheld the Tribunal's findings, emphasizing the importance of accurate documentation in supporting sales claims under tax laws.

Issue 4: Assessment of penalty under tax laws:
Apart from rejecting the high sea sales claim, the Assessing Officer proposed a penalty under relevant tax laws. The Tribunal upheld the penalty, noting that the turnover was accurately reflected in the accounts, warranting no interference with the cancellation of the penalty by the First Appellate Authority. The Court supported the Tribunal's decision on penalty assessment, considering the accuracy of the turnover records.

Issue 5: Disagreement between authorities on high sea sales claim:
The case involved a disagreement between the Assessing Officer, First Appellate Authority, and Tribunal regarding the validity of the high sea sales claim. While the First Appellate Authority initially allowed the claim based on practical considerations, the Tribunal and ultimately the High Court sided with the Revenue, highlighting discrepancies in import details and sales documentation. The Court dismissed the Tax Case (Revisions), affirming the rejection of the high sea sales claim by the Tribunal.