1977 (4) TMI 52 - Tri - VAT and Sales Tax

Summary

Issues:
Appeal against assessment order confirming tax liability for inter-state sales without Form F declaration for branch transfer.

Analysis:
The appeal challenged an assessment order confirming tax liability for inter-state sales without submitting Form F declaration for branch transfer. The appellant, an unregistered dealer in Orissa with a ply wood factory at Jaipur Road, claimed that the factory in Calcutta was the main office, and goods were transferred as branch transfers for manufacturing ply wood. The Assistant CST upheld the assessment, citing non-submission of Form F declarations as per the Amending Act of 1972. The appellant contended that specific proof of branch transfer obviated the need for Form F declarations, citing M.A. Tulloch & Co. vs. State of Orissa. The burden of proof for branch transfer, as per Section 6-A of the CST Act, required submission of Form F declarations. The legislative intent behind Section 6-A was to prevent evasion by proving that inter-state sales were not disguised as branch transfers. The burden of proof lay on the dealer, and Form F declarations were crucial for establishing branch transfers.

The contention revolved around the interpretation of Section 6-A and the necessity of Form F declarations for proving branch transfers. The legislative history and purpose of Section 6-A aimed to prevent evasion by distinguishing genuine branch transfers from inter-state sales. The burden of proof rested on the dealer to demonstrate that goods transferred between states were not sales but branch transfers. Form F declarations were introduced to substantiate such claims and prevent misuse of the provision. The absence of Form F declarations could lead to the entire amount being taxed at 10%, as per the Amending Act of 1972. The appellant's argument that specific proof of branch transfer negated the need for Form F declarations was countered by the legislative requirement for such declarations to validate branch transfer claims.

The judgment emphasized the significance of Form F declarations for proving branch transfers under Section 6-A of the CST Act. While the appellant cited specific evidence of branch transfers, the legislative framework mandated the submission of Form F declarations to validate such claims. The burden of proof for establishing branch transfers lay on the dealer, and non-compliance with Form F requirements could result in the assessment of inter-state sales tax liability. The decision highlighted the legislative intent behind Section 6-A to prevent tax evasion and ensure transparency in distinguishing genuine branch transfers from inter-state sales. Ultimately, the appeal was allowed, annulling the tax assessment and penalty, with a directive for refund if already paid.