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2024 (12) TMI 834 - AT - VAT / Sales TaxNature of transfer of goods - Inter-state Sales or Branch Transfers - whether the interstate transfer of goods by the appellant from its factory in Coimbatore to its depot in Palakkad in Kerala during from 01.04.1996 to 28.08.1996 were inter-state sales or branch transfers? - HELD THAT - The Sales Tax Appellate Tribunal recorded in the impugned order a finding that sales had occasioned the inter-state movement of goods and for that reason, central sales tax was payable. In view of the correspondence between the appellant and Argus recorded above which corresponded to the invoices, the finding in the impugned order agreed that sales occasioned the inter-state movement of goods under the disputed Forms F during the period 01.04.1996 to 28.08.1996. In respect of the transfers made during the rest of the AY, the order of assessment has already been set aside in the impugned order. The impugned order is correct and proper and needs to be upheld. The alternative prayer of the appellant is that if the demand of CST is upheld, an order may be issued under section 22 (1B) of the CST Act directing the State of Kerala to transfer the refundable amount which the appellant had paid as sales tax on the disputed transactions to the State of Tamil Nadu - In this case, while the amount of Central Sales Tax payable to the state of Tamil Nadu is Rs. 1,44,069/- (for Assessment Year 1996-1997) on the goods transferred from Tamil Nadu to Kerala, details of the sales tax claimed to have been paid in Kerala are not available. Therefore, it is not possible to pass an order under section 22(1B). The impugned order is upheld - appeal dismissed.
Issues Involved:
1. Nature of Goods Transfer: Inter-state Sales vs. Branch Transfers. 2. Validity of D-7 Records and Correspondence. 3. Central Sales Tax (CST) Liability and Exemption Claims. 4. Alternative Relief under Section 22(1B) of the CST Act. Issue-wise Detailed Analysis: 1. Nature of Goods Transfer: Inter-state Sales vs. Branch Transfers The primary issue was whether the transfer of goods by the appellant from its factory in Coimbatore to its depot in Palakkad during 01.04.1996 to 28.08.1996 constituted inter-state sales or branch transfers. The appellant claimed these were branch transfers, thus exempt from Central Sales Tax (CST), as the goods were moved to their own depot in Kerala. However, the Sales Tax Appellate Tribunal concluded that the movement of goods was occasioned by sales, making them inter-state sales. This conclusion was based on the D-7 records and correspondence, which indicated pre-arranged sales orders from Argus Cosmetics, occasioning the movement of goods from Tamil Nadu to Kerala. 2. Validity of D-7 Records and Correspondence The D-7 records, recovered during an inspection, played a crucial role in determining the nature of the transactions. These records included slips and correspondence between the appellant and Argus Cosmetics, indicating dispatch instructions and payments made directly to the appellant's head office in Coimbatore. The Tribunal found that these documents clearly showed that the goods were dispatched based on pre-arranged orders, which were indicative of inter-state sales. The Tribunal rejected the appellant's argument that these were mere dispatch instructions not amounting to purchase orders. 3. Central Sales Tax (CST) Liability and Exemption Claims The Tribunal upheld the CST liability for the period 01.04.1996 to 28.08.1996, amounting to Rs. 1,44,069/-, while setting aside the demand for the period after the inspection (29.08.1996 to 31.03.1997). The appellant's claim for CST exemption based on 'F Forms' was not accepted for the disputed period, as the Tribunal found that the transactions were inter-state sales. The Tribunal noted that the appellant had the burden of proof to demonstrate that the transfers were not sales, which they failed to do. 4. Alternative Relief under Section 22(1B) of the CST Act The appellant sought an alternative relief under section 22(1B) of the CST Act, requesting the transfer of refundable sales tax paid in Kerala to Tamil Nadu. However, the Tribunal could not grant this relief due to the lack of detailed information on the sales tax paid in Kerala. The Tribunal highlighted that for such an order to be passed, the amount of tax paid and the CST payable must be known, which was not the case here. Conclusion The Tribunal upheld the impugned order, affirming the CST liability for the disputed period and dismissing the appeal. The Tribunal found that the appellant failed to substantiate their claim of branch transfers and that the D-7 records clearly indicated inter-state sales. The alternative relief sought under section 22(1B) was also denied due to insufficient information regarding the tax paid in Kerala.
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