2003 (4) TMI 590 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Determination of whether a transaction is a stock transfer or an inter-State sale for the Assessment Year 1991-92.
2. Examination of the order passed by the Trade Tax Tribunal in Second Appeal No. 223 of 1997.

Issue 1: Determination of Transaction Nature:
The revision under Section 11 of U.P. Trade Tax Act was filed against the Trade Tax Tribunal's order regarding the nature of transactions as stock transfers or Central sales for the Assessment Year 1991-92. The assessee, a company with branch offices in various locations, claimed certain transactions as stock transfers, but the Assessing Authority considered them as inter-State sales. The First Appellate Authority partially allowed the appeal, recognizing some transfers as stock transfers and others as central sales. Both the department and the assessee filed Second appeals before the Trade Tax Tribunal, which were dismissed in a common order. The assessee challenged this order through the present revision.

Issue 2: Examination of Tribunal's Order:
During the hearing, the Counsel for the assessee argued that authorities should have independently examined each transaction to determine its nature. On the other hand, the Standing Counsel for the department contended that the nature of the transaction is a question of fact, and all relevant records were examined by the authorities, leading to relief for the assessee. However, the Court found that the Tribunal's order lacked detailed analysis. It was noted that the Tribunal should have considered specific dispatches made by the applicant to branches in Bombay, Calcutta, and Delhi to ascertain whether they were inter-State sales or stock transfers.

The Court decided to remand the matter back to the Tribunal for a fresh decision on merits, emphasizing that the Tribunal is the final fact-finding authority. Referring to legal precedents, the Court highlighted the importance of examining each transaction individually to determine its tax liability correctly. The Court set aside the Tribunal's order, allowed the revision, and directed the Tribunal to reconsider the appeal in accordance with the law and the Court's observations. No costs were awarded in this matter.