2018 (10) TMI 880 - HC - VAT and Sales Tax

Exemption form levy of sales tax - consignment sale of edible oil - form-F present - assessment provisional in nature and subject to final adjudication - Held that - The defence of the assessee that goods had actually been transferred from Mathura to other States, is yet to be adjudicated finally by the Tribunal. This appears to have been done in view of the fact that only provisional assessement proceedings were undertaken subject to a final assessment being made by the assessing authority. Section 28(8) of the Value Added Tax Act is clear inasmuch as the provisional assessment order would ultimately merge in the final assessment order. This Court is not required to make any observation with regard to merits of the respective claim of parties, at this stage. In the interest of justice - Revision disposed off with direction that revisionist shall deposit 50% of the disputed amount of tax within a period of four weeks. The assessee shall also furnish security other than cash or bank guarantee to protect the right of the State in respect of the balance amount and assessing authority would make all endeavours to conclude the regular assessment proceedings within a period of 3 months from the date of presentation of certified copy of this order.

Summary

Issues:
1. Tribunal's rejection of second appeal by the assessee
2. Discrepancy in assessing the nature of transactions as consignment sale
3. Examination of the defence of the assessee regarding the movement of goods
4. Legal arguments based on Division Bench judgment and Apex Court adjudication
5. Provisional assessment orders and final assessment procedures
6. Liability of the assessee and adjustments for the disputed tax amount

Analysis:
1. The Tribunal rejected nine second appeals by the assessee, upholding the orders of the assessing authority and the first appellate authority. The composite order of the Tribunal is challenged in the revisions.

2. The assessee, a registered dealer in edible oil, faced provisional assessment orders for nine months. The assessing authority dismissed the defence that the transactions were consignment sales backed by form-F, citing lack of evidence of goods transfer, as per toll plaza records.

3. The defence of the assessee, claiming alternative transportation routes, was not fully examined by the authorities due to the provisional nature of the assessment. The Tribunal did not conclusively adjudicate on the actual transfer of goods, leaving the defence unaddressed.

4. Legal arguments referenced a Division Bench judgment emphasizing the importance of Form-F for proving stock transfers and an Apex Court adjudication restricting inquiries beyond factual transfers to the assessee or related entities.

5. The provisional assessment orders under Section 28(8) of the Value Added Tax Act are temporary and subject to merging into final assessment orders. The defence of the assessee remains unexplored pending final adjudication by the assessing authority.

6. To balance equities, the Court directed the assessee to deposit 50% of the disputed tax amount within four weeks, provide non-cash security, and instructed the assessing authority to conclude regular assessment within three months. Any prior deposits by the assessee would be adjusted accordingly, clarifying that no merits were decided, leaving all issues open for the assessing authority's consideration.