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2020 (2) TMI 120 - HC - VAT and Sales TaxLevy of Sales Tax - inter-state transfer or not - Branch/Stock/Consignment transfer of goods - CST Act - HELD THAT - The learned Tribunal erred in reversing the cogent findings of the First Appellate Authority merely because the agent sold the goods in question immediately after the receipt of the goods from the Principal. This court explained the position and pre-requisites of an inter state sales in the case of M/S. ADVANCE PAINTS (P) LTD. VERSUS THE COMMERCIAL TAX OFFICER, THE SALES TAX APPELLATE TRIBUNAL (ADDL. BENCH) 2019 (12) TMI 540 - MADRAS HIGH COURT where it was held that there being no power vested in the authority to review its order under section 7 of the CST Act or to keep such order in abeyance, the stand of the second respondent in the impugned letters dated 27.2.2019 informing the petitioners that their on-line applications had been approved through oversight and that High Speed Diesel would be included in CST commodity after obtaining guidance of the higher authority cannot be countenanced even for a moment. The present writ petitions filed by the Assessee deserve to be allowed and the impugned order passed by the Sales Tax Appellate Tribunal deserves to be set aside - decided in favor of petitioner.
Issues involved:
1. Interpretation of provisions of the C.S.T. Act regarding Branch/Stock/Consignment transfer of goods. 2. Validity of penalty levied under Section 12(3)(b) of the Act for wrong claim of exemption. 3. Rejection of declaration in Form F and assessment based on Rule 12(5) of the CST Tamil Nadu Rules 1957. 4. Disallowance of claim under Section 6A of the CST Act 1956 for consignment sales. 5. Consideration of pre-existing contract for inter-state sales under the Central Sales Tax Act. Detailed Analysis: 1. The High Court addressed the issue of Branch/Stock/Consignment transfer of goods under the C.S.T. Act. The Tribunal reversed the First Appellate Authority's findings, holding the transactions taxable as inter-state sales. The Court disagreed, citing lack of evidence for inter-state sales and set aside the Tribunal's order. 2. The Court examined the penalty levied under Section 12(3)(b) for a wrong claim of exemption. Referring to a previous judgment, the Court agreed with the Appellate Assistant Commissioner's decision to delete the penalty, emphasizing that penalty is not warranted when turnover is available in the books. 3. The rejection of declaration in Form F and assessment under Rule 12(5) of the CST Tamil Nadu Rules 1957 was reviewed. The Court remanded the assessment back to the Assessing Officer, allowing the Assessee to rectify the defects by obtaining fresh F forms. 4. The disallowance of claim under Section 6A of the CST Act 1956 for consignment sales was analyzed. The Court considered various aspects and cited precedents to conclude that pre-payment by the consignment agent does not necessarily transform the agent into a purchaser, thus disallowing the claim under Section 6 of the CST Act. 5. The Court discussed the necessity of a pre-existing contract for inter-state sales under the Central Sales Tax Act. It emphasized the movement of goods from one State to another based on a contract as a prerequisite for taxation. The Court quashed the orders of the lower authorities, stating that timing of sale alone does not establish inter-state sales. By thoroughly analyzing each issue, the High Court provided a detailed interpretation of the legal provisions, citing relevant precedents and setting aside the Tribunal's decision in favor of the Assessee.
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