2014 (2) TMI 52 - HC - VAT and Sales Tax

Demand of differential duty - Whether on the facts and circumstances of the case, in the light of the categorical findings given by the Appellate Tribunal, the conclusion arrived by it that the petitioner is liable for sales tax on the differential turnover of Rs.19,63,463/- (out of Rs.52,33,463/-) solely based upon the approximate value incorporated in Form XX, that accompanied the goods for the purpose of transportation within the State, when there was no sale effected by it - Held that - Sales Tax Appellate Tribunal found that the journal voucher particulars of the assessee mentioned the amount of Rs.52,33,463/- relating to the foreign supplier sale and it was not reflected in the documents pertaining to the delivery of goods to M/s.Munasser Leather Private Limited and that Form XX reflected the value to the extent of Rs.32,50,000/- only. There being no further material that what was returned as purchase return was to the tune of Rs.52,33,463/-, we do not find any justifiable ground to accept the plea of the assessee that it is entitled to exemption on the entirety of Rs.52,33,463/-. The assessee, did not prove as a matter of fact that it had returned the entire imported item but on the other hand it stated that it used a portion of the imported wet blue skin. In the background of this admitted fact and that there are no materials to support the contention of the assessee that the turnover of Rs.52,33,463/- in entirety was returned as purchase return - Decided against assessee.

Summary

Issues involved:
1. Reversal of conclusions by the Appellate Tribunal regarding the turnover of imported "wet blue."
2. Liability for sales tax on the differential turnover based on approximate value and absence of sale.

Analysis:
1. The assessee imported wet blue skins and used a portion for conversion into finished leather. The remaining goods were handed over to another company as per the foreign supplier's instructions. The Assessing Officer assessed the turnover under sales tax laws, considering the assessee as an agent facilitating the sale to the other company. The Appellate Assistant Commissioner, however, accepted the assessee's case, finding no proof of agency relationship and setting aside the assessment order.

2. The Sales Tax Appellate Tribunal reviewed the case and acknowledged that the goods were transferred to the other company without any consideration received by the assessee. The Tribunal restricted the relief granted to the assessee to a lower amount than claimed, based on the approximate value of the goods transferred. The assessee challenged this decision, arguing that since no sale consideration was received, the turnover should not be restricted to the lower value. The Court disagreed with the assessee, noting discrepancies in the documentation and lack of evidence supporting the full return of the imported items, ultimately dismissing the revision petition.

This detailed analysis covers the issues raised in the legal judgment, outlining the arguments presented by the parties and the reasoning behind the decisions made by the authorities involved.