2013 (10) TMI 257 - HC - VAT and Sales Tax

Classification of sale - Inter state sale or Intra state sale - Held that - recorded a categorical finding that the sale took place from the Hyderabad Depot and CST @ 4% was recovered on the said sale. Further the absence of pre-existing contract for sale was also noticed by the Dy. Comm., while passing the order dated 13.9.2001. The said findings recorded by the Dy. Comm. though questioned by the Department have been upheld by the Tax Board by its impugned judgment dated 16.10.2003 - A perusal of the judgment dated 16.10.2003 passed by the Tax Board would reveal that the petitioner Department has not questioned the validity and / or authenticity of the documents, which were produced before the Dy. Comm., which form the bedrock of passing of the order by the said appellate authority. Further the findings based on those documents are essentially findings of fact and the absence of pre-existing contract of sale between the assessee and the Gulburga firm has been the case throughout i.e. even the A.O. has failed to point out any such pre-existing contract, in absence whereof the sale cannot be treated as inter-State sale - Decided against Revenue.

Summary

Issues:
- Appeal against the judgment of Rajasthan Tax Board
- Assessment of tax on turnover for the year 1996-97
- Discrepancy in goods transfer to Hyderabad Depot
- Interpretation of inter-State sale under section 3(a) of the Act
- Orders passed by Deputy Commissioner and Tax Board upheld
- Challenge to findings of fact by the Department
- Absence of pre-existing contract for sale

Analysis:
The case involves an appeal against the judgment of the Rajasthan Tax Board, where the Revenue's appeal was rejected. The dispute arose from the assessment of tax on the turnover for the year 1996-97, where discrepancies were found in the transfer of goods to a Hyderabad Depot. The Assessing Officer levied additional tax on the basis that goods were directly supplied to a different entity instead of reaching the designated depot. The Deputy Commissioner, upon appeal, considered various documents related to the transaction and concluded that there was no inter-State sale due to the absence of a pre-existing contract for sale. The Tax Board, after hearing arguments from both sides, upheld the Deputy Commissioner's decision based on the factual findings and lack of evidence establishing an inter-State sale.

The petitioner contended that the goods indeed moved from Rajasthan to the final destination, Gulburga, and accused the assessee of manipulating records to benefit from depot transfer provisions. However, it was revealed that the goods were sold from the Hyderabad Depot, with CST levied on the sale, and there was no evidence of a pre-existing contract for sale with the Gulburga firm. The Department challenged these findings as findings of fact, but the Tax Board affirmed the decision based on the documents presented and the consistent absence of a sale contract.

Ultimately, the Court dismissed the revision petition, emphasizing that the findings were based on factual evidence, the authenticity of documents was not questioned, and the absence of a pre-existing contract for sale remained a crucial factor throughout the proceedings. The judgment highlights the importance of factual findings and the interpretation of inter-State sales under the relevant legal provisions, leading to the rejection of the appeal and upholding the decisions of the Deputy Commissioner and Tax Board.