2018 (12) TMI 1 - HC - VAT and Sales Tax

Exemption from payment of tax - Cotton Fabrics - stock transfer - Section 9(2) read with Section 30 of the Central Sales tax Act - Held that - The finding recorded by the assessing authority confined by the first appellate authority as well as Tribunal are finding of facts, need no interference by this Court. No question of law is involved and therefore the questions of law referred by the assessee and decided against the assessee - The autorities below including the Tribunal have arrived at the conclusion that it is not the stock transfer but is a sale against the orders which are received by the revisionist from the buyers in advance. No question of law arises in all the four revision petitions related to Central Sales Tax Act, accordingly the same are dismissed - petition dismissed.

Issues Involved:
1. Classification of goods manufactured by the assessee under the U.P. Trade Tax Act.
2. Permitting revenue to take different stands on the same issue.
3. Tribunal taking a different view from another co-ordinate bench without referring the matter to a larger bench.
4. Classification issue decided based on common parlance meaning.
5. Rejection of account books and enhancement of turnover based on a survey report.
6. Rejection of stock transfer claim without examining each transaction.

Detailed Analysis:

1. Classification of Goods:
The primary issue was whether the goods manufactured by the assessee, 'Narrow Woven Fabrics' (NWF), were classified correctly under the U.P. Trade Tax Act. The Assessee claimed exemption under Notification No. 7038 dated 31.01.1985, treating NWF as 'Cotton Fabrics of all Varieties.' The Tribunal, however, classified the goods as 'Tapes/Laces' under Notification No. 2376 dated 23.11.1998, based on common parlance meaning without consulting experts. The Court upheld the Tribunal's decision, noting that the goods did not fall under the category of textiles exempted from tax.

2. Permitting Revenue to Take Different Stands:
The Assessee argued that the revenue was unjustified in taking different stands on the same issue, contrary to the full bench judgment of the Supreme Court in C.C.E. Mumbai Vs. M/s Amar Bitumen & Allied Products Pvt. Ltd. The Court found no merit in this argument, as the classification issue was based on factual findings specific to the case.

3. Tribunal Taking a Different View:
The Assessee contended that the Tribunal erred in taking a different view from another co-ordinate bench's decision in the sister concern's case for the assessment year 1997-98, without referring the matter to a larger bench. The Court held that the Tribunal's decision was based on the specific facts and evidence of the case, and there was no requirement to refer the matter to a larger bench.

4. Classification Based on Common Parlance:
The Assessee argued that the classification issue should not have been decided based on common parlance meaning, especially when cotton fabrics were defined under the Central Sales Tax Act. The Court upheld the Tribunal's approach, emphasizing that common parlance understanding was appropriate in the absence of a specific statutory definition.

5. Rejection of Account Books and Enhancement of Turnover:
The Assessee challenged the rejection of account books and enhancement of turnover based on a survey report dated 10.03.1998, which allegedly lacked evidence of turnover suppression. The Court found that the assessing authority had valid grounds for rejecting the books of accounts and enhancing the turnover based on the survey findings and material on record.

6. Rejection of Stock Transfer Claim:
Under the Central Sales Tax Act, the Assessee's claim of stock transfer to its Delhi branch was rejected by the assessing authority. The Court upheld this rejection, noting that the survey team had recovered documents indicating that the goods were sold against orders received in advance, rather than being stock transfers. The Tribunal's conclusion that these were sales and not stock transfers was affirmed.

Conclusion:
The Court dismissed all the revision petitions, affirming the Tribunal's findings and decisions. The classification of NWF as 'Tapes/Laces' was upheld, and the rejection of the Assessee's claims regarding stock transfers and account books was deemed justified. No questions of law were found to warrant interference by the Court, and the decisions of the lower authorities were affirmed.

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