2016 (12) TMI 313 - HC - VAT and Sales Tax

Dsallowance of the stock transfer effected by the petitioner in their depot Tada, which is in the State of Andhra Pradesh - whether inter-state sale or stock transfer? - Form-F - Held that - the respondent has misdirected itself in not posing a right question for arriving at a correct conclusion. Had the respondent examined the correctness of Form-F Declaration and conducted an enquiry, by making necessary verification, then the respondent would have arrived at a correct conclusion and on account of the fact that the enquiry was not conducted, it has resulted in an erroneous order being passed. For all the above reasons, this Court is of the considered view that the impugned orders are not sustainable and call for interference. The matter is remanded to the respondent to conduct enquiry, examine the correctness of the Form-F Declaration and afford an opportunity of personal hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenge to disallowance of stock transfer under CST Act and TNGST Act.

Analysis:
1. The petitioner, a Public Sector Oil Marketing Corporation, challenged orders disallowing stock transfer to their depot in Andhra Pradesh. The petitioner transferred High-Speed Diesel and Motor spirit to the depot, claiming it as stock transfer by filing Form-F Declarations. Enforcement officials found defects, issued notices, and proposed penalties under TNGST Act.

2. The respondent disbelieved the petitioner's case based on a statement by a Senior Operation Officer, concluding it was an inter-state sale without conducting an enquiry on the Form-F Declaration filed by the petitioner. The respondent's error was not verifying the particulars in the declaration, as explained by the Supreme Court and Kerala High Court.

3. The respondent's failure to conduct an enquiry and reliance solely on the officer's statement led to an incorrect conclusion of inter-state sale. The Division Bench's decision highlighted the necessity of verifying the truth of particulars in Form-F and considering other evidence produced by the dealer.

4. The petitioner argued that the immediate disposal of goods on the same day does not negate stock transfer, citing a Division Bench decision. An enquiry could reveal whether it was a consignment sale or inter-state sale, emphasizing the importance of proper examination of documents.

5. During the proceedings, the petitioner obtained a certificate from the Assistant Commissioner certifying tax remittance under APGST Act for goods received from outside Tamil Nadu. The certificate's content should be considered during the enquiry on Form-F Declaration, as per previous court decisions.

6. The Court held that the respondent's failure to conduct a proper enquiry resulted in an erroneous order. The impugned orders were quashed, and the matter was remanded to the respondent for a thorough examination, verification of Form-F Declaration, and a speaking order in accordance with the law. No costs were awarded, and connected petitions were closed.