2016 (1) TMI 507 - HC - VAT and Sales Tax

Interstate sale and stock transfer - Assistant commissioner (CT), Kerala revealed that the petitioner had not declared the transaction details in Form 8F in respect of a large number of consignments at the border check posts at Kerala which leads to a suspicion on the stock transfers effected from Chennai to Kerala. Therefore, the 5th respondent proposed to revoke exemption allowed on the entire stock transfer of ₹ 91,02,94,770/- and levy tax at 5% treating them as outright interstate sales. - TNVAT - Held that - The issue of stock transfer and sufferance of taxes are to be proved by documents only. Hence, to give quietus to the issue, this court is of the view that yet another opportunity shall be provided to the petitioner. Hence, the impugned order dated 28.05.2015 is set aside and the matter is remitted back to the 4th respondent for passing orders afresh. The petitioner is permitted to produce all the stock transfer related documents, check post partaiculars and the details of payments made in respect of the assessments completed by the Kerala authorities, along with tax payment certificates related to the year 2012-13 - Matter remanded back.

Summary

Issues:
Petitioner challenging assessment order for assessment year 2012-13 regarding stock transfer exemption.

Analysis:
The petitioner, a company engaged in the manufacture of edible oil, claimed exemption on stock transfers to its branches in Kerala. The dispute arose when the 5th respondent proposed to revoke the exemption and levy tax at 5% due to alleged non-compliance with filing Form 8F declarations for consignments at Kerala border check posts. The petitioner contended that most transfers complied with regulations, and goods were physically delivered and taxes paid in Kerala. Despite objections and document verification, the 5th respondent disallowed the exemption and levied penalties. The petitioner sought rectification, but no action was taken, leading to a legal challenge (para 2.1-2.2).

In a previous case, the court directed the petitioner to produce all relevant documents to support the stock transfer exemption claim. However, the petitioner failed to provide all required materials, leading to the 4th respondent disallowing the exemption based on incomplete documentation. The court noted the importance of proving stock transfers and tax payments through proper documentation. The petitioner expressed readiness to submit the necessary documents, prompting the court to grant another opportunity to present the required paperwork for a fair assessment (para 2.3, 6).

The court set aside the impugned order and remitted the matter back to the 4th respondent for fresh consideration. The petitioner was given two weeks to submit all stock transfer-related documents, check post particulars, payment details, and tax payment certificates for the assessment year 2012-13. The 4th respondent was directed to review the documents, provide a personal hearing to the petitioner, and issue fresh orders within four weeks. Failure to comply would allow the 4th respondent to make a decision based on available information (para 7).