2016 (11) TMI 463 - HC - VAT and Sales Tax

Genuinity of transaction - consignment sale - Held that - the transactions with M/s. Jay Bhavani Enterprise, M/s. Maharashtra Agro Products and M/s. Prabhat Oil Industries as genuine, it cannot be said that any substantial question of law arise as sought to be contended on behalf of the State. The findings recorded by the learned Tribunal are on appreciation of evidence and the material on record. As observed hereinabove after considering the material on record and considering the transactions with each of the aforesaid sellers, the learned Tribunal has specifically given the finding which cannot be said to be either perverse and/or contrary to the evidence on record. Even the report from the Maharashtra Government upon which the reliance has been placed has been dealt with and considered by the learned Tribunal - no substantial question of law arise - appeal dismissed - decided against appellant-Revenue.

Summary

Issues Involved:
Appeal against judgment and order dated 08.05.2015 passed by Gujarat Value Added Tax Tribunal regarding consignment sale transactions with specific entities and liability of additional tax, interest, and penalty.

Analysis:

Issue 1: Appeal against Tribunal's Judgment
The State of Gujarat appealed against the Tribunal's judgment regarding consignment sale transactions with specific entities and the liability of additional tax, interest, and penalty. The High Court noted that this was the second round of litigation, with the respondent previously appealing against the assessment order, which was dismissed by the first Appellate Authority and the Tribunal. The High Court had earlier remitted the matter back to the Tribunal for a fresh decision due to procedural irregularities. The Division Bench observed that the Tribunal had failed to consider that material was gathered behind the back of the assessee, leading to a lack of opportunity to respond, thus vitiating the Tribunal's findings.

Issue 2: Tribunal's Decision on Remand
Upon remand, the Tribunal allowed the appeal by the assessee, emphasizing the genuineness of the transactions with specific entities. The Tribunal considered various documents provided by the assessee, including proforma invoices, gate passes, lorry receipts, declarations in Form 45A, and detailed bank statements. It was noted that payments were received through cheques, and 'F' Forms issued by competent authorities were produced as evidence of consignment sales. The Tribunal's findings were based on a thorough appreciation of evidence and material on record, concluding that the transactions were genuine and rejecting the State's contentions.

Issue 3: High Court's Decision
The High Court, after reviewing the Tribunal's detailed findings and the evidence presented, concluded that no substantial question of law arose from the Tribunal's decision. The High Court noted that the Tribunal's findings were based on a proper evaluation of the evidence, including the report from the Maharashtra Government. As the Tribunal's decision was not deemed perverse or contrary to the evidence, the High Court dismissed the appeal, affirming the Tribunal's judgment. Consequently, the main Tax Appeal and a related Civil Application were both dismissed by the High Court.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing the importance of a thorough evaluation of evidence in tax matters and the need for procedural fairness in such cases.