2019 (8) TMI 1165 - HC - VAT and Sales Tax

Imposition of sales tax - interstate sale of confectionery items from Greater Noida to Delhi - stock transfer or not - correctness of survey claimed to have been conducted by the U.P. revenue authorities, at Delhi - HELD THAT - Clearly, there was no power under the Act to conduct such a survey independently, i.e. without participation of the Delhi sales tax authorities. Also, as a fact, there does not appear to exist any evidence of such survey having been conducted. Merely because such entries had been recorded in Ex.13, including entries with respect to the sale of goods made inside the State of U.P., it could not and it did not lead to the conclusion that the other entries with respect to transportation of goods to Delhi pertained to sale of those goods. Perusal of the order passed by the Tribunal does not, in any way, bring out evidence or reasoning in support of such conclusion. On the other hand, there does not appear to exist any consideration of the claim made by the assessee supported by Form-F as also assessment orders passed by the Delhi sales tax authorities. Matter requires further reconsideration - revision allowed by way of remand.

Summary

Issues:
1. Jurisdiction of U.P. revenue authorities to conduct a survey in Delhi.
2. Dispute regarding stock transfer of goods from Greater Noida to Delhi.
3. Reliability of evidence and reasoning in the assessment order.

Jurisdiction Issue:
The High Court examined the jurisdiction of U.P. revenue authorities to conduct a survey in Delhi. It was noted that there was no provision under the U.P. Trade Tax Act to independently conduct a survey in Delhi without the involvement of Delhi sales tax authorities. The Court emphasized the lack of evidence supporting the alleged survey in Delhi, concluding that such proceedings were without jurisdiction.

Stock Transfer Dispute:
The case involved a dispute regarding the stock transfer of goods from Greater Noida to Delhi. The assessee claimed that all transactions were covered by Form-F issued by the Delhi Branch and argued that the existence of the Delhi Branch was evidenced by these forms and previous tax orders from Delhi revenue authorities. The assessing authority, however, disbelieved the existence of the Delhi godown based on seized documents and concluded that the goods were sold to Delhi instead of being transferred.

Reliability of Evidence and Reasoning:
The Court analyzed the evidence presented, particularly Exhibit 13 seized from the Greater Noida godown, which contained details of expenses and transactions. The assessee argued that the entries in the exhibit were for personal remembrance and included both intrastate sales and stock transfers to Delhi. The Court found the revenue authorities' reasoning simplistic, emphasizing that the entries did not conclusively prove sales outside the state. The Court criticized the lack of consideration for the Form-F and Delhi tax orders in the assessment, highlighting the need for a factual examination before dismissing the appeal.

In conclusion, the High Court set aside the order of the Trade Tax Tribunal and remitted the matter for a fresh decision based on existing evidence, emphasizing the importance of a thorough examination of all relevant aspects before reaching a conclusion.