2021 (3) TMI 366 - HC - VAT and Sales Tax

Movement of goods, taking place or not - Form XXA (under Rule 35A of the TNGST Rules) - Discharge of burden to prove - whether the production of Form XXA would suffice to establish the plea taken by the petitioner-dealer that there was movement of goods from Chennai to Bangalore? - HELD THAT - The Tribunal, being the last fact finding authority, should have made an endeavor to consider the grounds raised by the petitioner, more particularly, the ground that the petitioner had produced a copy of Form XXA containing the seal of the Check Post Officer. Unfortunately, the Tribunal did no such endeavor. So far as the First Appellate Authority is concerned, he would state that the copies of the documents produced by the petitioner do not contain the seal of the check post. Before us, the copy of Form XXA, one of the duplicate of which is retained by the petitioner, has been produced and a colour photostat copy of the same reveals that there is a round seal indicating it to be a seal of the check post. The date and time of the check post, where the seal was affixed, is not clear from the photostat copy - It is not in dispute that the petitioner, at the first instance, by their reply dated 02.08.2006, had relied upon Form XXA to state that the goods moved from Chennai to Bangalore. The initial burden cast upon the petitioner in terms of Rule 35A of the TNGST Rules was discharged and the onus shifts on the Revenue to establish that the stand taken by the petitioner stating that Form XXA contained the seal of the Check Post Officer was incorrect. This exercise has not been done - while completing the assessment, the Assessing Officer conveniently did not touch upon the said issue but levied tax on the transaction only on the ground that the petitioner was not a registered dealer in the State of Tamil Nadu. The Tribunal could have examined as to veracity of the stand taken by the dealer. The benefit should enure in favour of the petitioner-dealer as the Revenue failed to discharge the onus cast upon them - Tax Case Revision is allowed.

Summary

Issues:
Challenging correctness of order by Sales Tax Appellate Tribunal under TNGST Act - Proof of movement of goods from Chennai to Bangalore based on Form XXA and lorry receipts.

Analysis:
The petitioner, a dealer under Karnataka General Sales Tax Act, challenged an order by the Sales Tax Appellate Tribunal regarding the movement of goods from Chennai to Bangalore. The key issue was whether the petitioner had sufficiently proven the movement of goods and if the production of Form XXA, lorry receipts, and other documents was enough to establish this claim. The petitioner purchased HDPE granules through high sea sales, which were detained but later released after a court order. The respondent alleged that the goods did not move from Chennai to Bangalore based on border check post records. The Assessing Officer confirmed this and levied tax, focusing on the petitioner's registration status in Tamil Nadu. The petitioner's appeal to the Appellate Deputy Commissioner and the Tribunal was dismissed without proper consideration of the evidence presented.

The High Court reframed the substantial question of law to focus on whether the Tribunal was justified in ignoring the Form XXA declarations and lorry receipts as evidence of goods movement. The Court noted discrepancies in the assessment process, where the Assessing Officer did not verify the petitioner's claims adequately and focused solely on registration status. The Tribunal's decision lacked independent reasoning and failed to address the petitioner's key evidence. The Court emphasized that the burden initially placed on the petitioner under Rule 35A of the TNGST Rules was discharged, shifting the onus to the Revenue to disprove the petitioner's claims. However, the Revenue did not adequately verify the evidence provided by the petitioner, leading to a failure to meet the burden of proof.

Ultimately, the High Court ruled in favor of the petitioner-dealer, stating that the benefit should go to them as the Revenue failed to meet its burden of proof. The Tax Case Revision was allowed, and the substantial question of law was answered in favor of the petitioner, with no costs imposed. The judgment highlighted the importance of proper verification and consideration of evidence in tax assessment cases to ensure fairness and justice in decision-making.