2020 (2) TMI 746 - HC - VAT and Sales Tax

Revision of assessment - exemption on turnover - inter-state sales or not sales - Assessing Authority has taken a view that the Sale that had taken place at Pondicherry is Inter-State Sales based on the alleged admission made by the Assessee - HELD THAT - Since the factual finding has been arrived at by the first Appellate Authority which includes the observation that the Stock Books has been initialed and sealed by the Assessing Authority, there can be no further proof to be filed by the Revenue against such entries made therein. Those factual findings reveal that the Branch at Pondy had sufficient stock of the goods and whenever orders come to Pondicherry Branch, sales has taken place. The finding given by the Tribunal that the sales effected at Pondicherry were only pursuant to the transfer of stocks made then and there by the Tamil Nadu Branch/Dealer has no basis. The Tribunal, being final fact finding Authority, ought to have gone into those factual aspects in detail - We do not feel that the reason given by the Tribunal for taking a different stand for reversing the factual findings of the first Appellate Authority has got any basis and sustainability. Tribunal has erred in giving such a finding for making a reversal of the order passed by the first Appellate Authority - the order passed by the first Appellate Authority is restored - Petition allowed.

Summary

Issues:
Challenging a common order passed by the Tamil Nadu Sales Tax Appellate Tribunal regarding the taxation of sales made through a branch in Pondicherry during the assessment years 1994-95 and 1995-96.

Analysis:
The Writ Petitioner, a dealer of medicine with a branch in Pondicherry, contested the assessment order treating sales through the Pondicherry branch as Inter-State Sales. The first Appellate Authority reversed the assessment order, but the Tribunal, in the impugned order, reinstated the Assessment Order based on an alleged link between customer orders in Pondicherry and goods transferred from Tamil Nadu to Pondicherry. The Tribunal cited precedents and emphasized the connection between customer orders and goods movement. The Revenue argued that the sales were Inter-State Sales as goods were transferred based on specific orders from customers in Pondicherry.

The first Appellate Authority's factual findings, including stock book maintenance and stock availability at the Pondicherry branch, contradicted the Tribunal's conclusion. The Tribunal's finding lacked specific reasoning, unlike the detailed analysis by the first Appellate Authority, which highlighted discrepancies in goods dispatches and stock replenishments. The Tribunal's failure to delve into factual aspects led to an erroneous reversal of the first Appellate Authority's order.

Given the detailed factual findings by the first Appellate Authority and the lack of substantive reasoning in the Tribunal's decision, the High Court held that the Tribunal erred in reversing the first Appellate Authority's order. Consequently, the High Court set aside the Tribunal's order and restored the first Appellate Authority's decision, allowing the Writ Petitions without costs.