2022 (10) TMI 137 - HC - VAT and Sales Tax

Disallowance of claim of exemption as branch transfer - interstate sales or not - period of limitation provided under Section 55 of the Tamil Nadu General Sales Tax Act, 1959 - requirement to file Form - F to claim exemption under Section 6A of Central Sales Tax Act, 1956 - HELD THAT - The purpose of assessment under the taxing enactment is to arrive at the correct tax payable by an assessee. An enquiry that is contemplated, the burden of proof was on the petitioner to establish that the movement of goods was otherwise than by way of sale and for this purpose, the petitioner was required to furnish Form - F as is prescribed. The present writ petition is inspired from the decision of the Hon'ble Full Bench of Kerala High Court in M SYED ALAVI AND OTHERS VERSUS STATE OF KERALA 1981 (5) TMI 113 - KERALA HIGH COURT wherein, after referring to sub-section (2) to Section 105 of C.P.C, the Court in para 17 ultimately held The effect of non-filing of an appeal is that the finding is binding on the assessing authority when the case went back to that authority and also on the Appellate Assistant Commissioner while disposing of the appeal from the revised decision of the assessing authority. As far as the issue relating to branch transfer for which Section 6A exemption was denied by the Assessing Officer and confirmed by the Appellate Assistant Commissioner, the petitioner did not take it up on further appeal before the Appellate Tribunal. The facts on record indicate that the petitioner has not produced any documents to revise the assessment of tax in respect of the turnover of Rs.10,23,728/-. As far as the balance turnover of Rs.19,71,803/- which was remanded back to the Assessing Officer for verification is concerned, the order dated 31.12.2002 of the Assessing Officer indicates that there also the petitioner had not procured Form F - petitioner had produced only collateral evidence to substantiate stock transfer without producing Form-F for a turnover of Rs.19,71,803/- by the Additional Commercial Tax Officr vide order dated 31.12.2002. Even if the Form-F was not filed by the petitioner for the balance turn over, the petitioner is entitled to file copies of transport documents such as lorry receipts, stock transfer invoices and delivery chalan etc. to substantiate such stock transfers. Once the case is remanded back, the order remanding the case back to the Original Authority is to be construed as an Interlocutory Order. The case is remanded back to the first respondent Appellate Tribunal to re-examine the issue in the light of the law settled by the Kerala High Court in M.Syed Alavi and Others vs. State of Kerala, within a period of six months from the date of receipt of a copy of this order. Petition allowed.

Summary

Issues Involved:
1. Challenge to the impugned order dated 12.06.2007 by the Tribunal.
2. Disallowance of exemption on branch transfer due to non-filing of Form F.
3. Limitation period under Section 55 of the Tamil Nadu General Sales Tax Act, 1959.
4. The authority of the Appellate Tribunal to re-examine issues not appealed earlier.

Issue-wise Detailed Analysis:

1. Challenge to the Impugned Order:
The petitioner challenged the Tribunal's order dated 12.06.2007, which upheld the assessment order disallowing exemption on a turnover of Rs.10,23,728/- due to non-filing of Form F. The Tribunal confirmed the assessment, stating that the petitioner did not produce the required declarations or documents within the stipulated time frame.

2. Disallowance of Exemption on Branch Transfer:
The Tribunal disallowed the exemption on branch transfer for a turnover of Rs.10,23,728/- as the petitioner failed to produce Form F. The petitioner argued that it was not mandatory to file Form F to claim exemption under Section 6A of the Central Sales Tax Act, 1956, during the disputed period, and other documents could establish the branch transfer. However, the Tribunal found this claim unacceptable, as the petitioner admitted to not having the required declarations.

3. Limitation Period Under Section 55:
The Tribunal noted that the original assessment was made on 28.06.1996, and any rectification under Section 55 of the Tamil Nadu General Sales Tax Act, 1959, had to be made within five years from the date of the order, expiring on 27.06.2001. Since the petitioner produced documents only on 06.12.2002, the period of limitation had expired, making any rectification impossible.

4. Authority of the Appellate Tribunal to Re-examine Issues:
The Tribunal emphasized that the petitioner did not appeal against the first appellate authority's order dated 11.12.1998, confirming the assessment on the disputed turnover. The Tribunal cited the Kerala High Court's decision in M.Syed Alavi and Others vs. State of Kerala, which held that the Appellate Tribunal could re-examine the case afresh, even if no appeal was filed against the initial order. The Tribunal was expected to evaluate the claim based on additional documents and evidence in light of settled law.

Conclusion:
The High Court concluded that the Appellate Tribunal should have re-examined the case based on the additional documents and law settled by the Kerala High Court and followed by the Madras High Court. The impugned order was deemed unsustainable and set aside. The case was remanded to the Appellate Tribunal to re-examine the issue within six months, allowing the petitioner to produce documents to substantiate the stock transfer. The Tribunal may remit the case back if convinced of the documents' genuineness. The writ petition was allowed with these observations, and no costs were imposed.