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2014 (10) TMI 640 - HC - VAT and Sales TaxStock transfer - CST - Whether under the facts and circumstances of the case the Form F issued by the M/s Rajdhani Traders, Delhi and M/s Radhika Enterprises, Delhi are valid declaration form under Section 6A of the Central Sales Tax Act, 1956 - Held that - As per Scheme of Section 6A of the CST Act read with Rule 2(cc) and 12(5) of the Rules, one of the most crucial requirement to avail benefit of a Form-F is that such Form-F should be obtained by the transferee from the Prescribed Authority. This follows that it should be a validly obtained and not an invalid, illegal, forged or fabricated form. The postilion may be different, depending upon the facts and circumstances; in a case of simple transaction of purchase and sale when a selling dealer bonafidely and with due diligence received a form from his purchasing dealer for concessional rate of tax or exemption against a sale. But Section 6A is entirely a different provisions. It is by legal fiction that movement of goods from one State to another State may be deemed to have occasioned as a result of sale, if the conditions specified in sub-section (1) of Section 6A are not satisfied . If a dealer claims a transaction to be covered by Section 6 A of the CST Act, then he has to satisfy the conditions mentioned in the said provision and has also to submit a declaration in Form F, which should be genuine one. An in-genuine Form F may not entitle the dealer to avail the benefit under Section 6 A of the Act in respect of a particular transaction, for which, in-genuine Form F has been filed. - A case involving claim under Section 6 A of the CST Act stands on different footing than the case of interstate sale against Form- C, in which case, it may be possible that selling dealer has bona fidely effected interstate sale and bona fidely received Form-C to avail concessional rate of tax - Decided against assessee.
Issues Involved:
1. Justification of the Tribunal in remanding the case to the assessing officer. 2. Validity of the Tribunal's direction to obtain a fresh enquiry report regarding all Form F. 3. Validity of Form F issued by M/s Rajdhani Traders, Delhi, and M/s Radhika Enterprises, Delhi, under Section 6A of the Central Sales Tax Act, 1956. Issue-wise Detailed Analysis: 1. Justification of the Tribunal in Remanding the Case to the Assessing Officer: The Tribunal's decision to remand the case to the assessing officer was challenged. The applicant argued that the consigner and consignees were registered dealers and that the Forms-F were validly issued by the Delhi VAT Department. The applicant maintained compliance with Rule 4(4) of the CST (UP) Rules, 1957, and claimed no collusion in procuring the Forms-F. The applicant cited various judgments to support the argument that bona fide receipt of Forms-F should not result in denial of benefits, even if the purchasing dealer committed an illegality. The respondent contended that the Forms-F were invalid as they were not obtained from the prescribed authority by the alleged agents. The Tribunal's remand was justified to examine the dispatches and other evidence. The court upheld the Tribunal's decision, emphasizing the necessity of a valid Form-F obtained from the prescribed authority. The remand was deemed appropriate for further inquiry, causing no prejudice to the applicant. 2. Validity of the Tribunal's Direction to Obtain a Fresh Enquiry Report Regarding All Form F: The Tribunal directed obtaining a fresh enquiry report on all Forms-F, as the initial report covered only a few forms. The applicant argued that the Forms-F were bona fide received and complied with all legal requirements. The respondent countered that no evidence was provided to show that the Forms-F were obtained from the prescribed authority, rendering them invalid. The court reiterated that under Section 6A of the CST Act, a valid Form-F must be obtained from the prescribed authority. The Tribunal's direction for a fresh enquiry was upheld to ensure all forms were scrutinized, as partial verification was insufficient. The remand aimed to establish the authenticity of the Forms-F comprehensively. 3. Validity of Form F Issued by M/s Rajdhani Traders, Delhi, and M/s Radhika Enterprises, Delhi: The applicant claimed that the Forms-F were validly issued and received in good faith. However, the enquiry revealed that the Forms-F were not issued by the Delhi VAT Authorities to the alleged agents but to another firm, making them invalid. The applicant failed to provide evidence that the Forms-F were obtained from the prescribed authority. The court emphasized that under Section 6A of the CST Act, the burden of proof lies on the dealer to show that the movement of goods was not a result of a sale. The Forms-F must be validly obtained from the prescribed authority. The applicant's failure to prove the genuineness of the Forms-F led the court to conclude that the Forms-F were invalid declarations under Section 6A. The court cited the Supreme Court's judgment in Ashok Leyland, reinforcing the requirement for valid Forms-F to claim benefits under Section 6A. Conclusion: The court dismissed the revision, upholding the Tribunal's decision to remand the case for further inquiry and confirming the invalidity of the Forms-F. The questions of law were answered in favor of the revenue and against the assessee, reinforcing the necessity of validly obtained Forms-F for claiming benefits under Section 6A of the CST Act.
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