2016 (12) TMI 820 - HC - VAT and Sales Tax

Deletion of tax levied on out and out sale of ₹ 7,84,182/with consequential interest - exemption under Section 6(2) of the Central Sales Tax Act, 1956 from that of out and out sale under Section 4 of the said Act - C Forms - inter state sale u/s 6(2) - Held that - The appellant before the Tribunal and respondent before us produced a chart showing out and out sale and the relevant documents. These documents were perused by the Tribunal with the assistance of both the Advocates appearing for the dealer and the Revenue. No objection was raised to the course adopted by the Tribunal. The Tribunal had perused before it the entire set of documents, including the purchase order and the details of supply. It found that the goods were despatched from Madhya Pradesh to Hyderabad on 22-3-2004 in pursuance of a purchase order dated 2-3-2004. All the documents evidencing this were produced. Therefore, the Tribunal concluded, as a matter of fact, that the goods have directly gone to the purchasing party at Hyderabad, without entering the State of Maharashtra. Hence, the appellant before it and the respondent before us was not obliged to produce the C Form. It was found, as a matter of fact, that the State of Maharashtra cannot levy, assess and recover the central sales tax as the goods have not moved from Maharashtra. That is how the levy of tax to the extent of ₹ 1,19,980/was deleted - the entire exercise is factual in nature. Based on the undisputed factual position, the claim was granted - The direction to delete the tax in the light of the admitted documentary evidence, therefore, cannot be faulted - application dismissed.

Summary

Issues:
1. Tribunal allowing appeal and remanding matter back to First Appellate Authority.
2. Allegation of raising new ground without sufficient proof or documentary evidence.
3. Disallowance of tax due to lack of "C" Forms for a specific volume of sales.
4. Dispute regarding the nature of the transaction - out and out sale or sale in transit.
5. Tribunal's decision to delete tax based on factual evidence.

Analysis:
1. The Tribunal allowed the appeal filed against the order of the First Appellate Authority and remanded the matter back to delete the tax levied on the out and out sale, surprising the Revenue. The applicant argued that the respondent was allowed to raise a new ground without sufficient proof or documentary evidence, and the Tribunal refused to refer the question of law to the Court, leading to a request for reference application.

2. The Assessment Order indicated that the general turnover of sales under Section 75 was determined, including central sales tax collection under Section 6(2), supported by "E1" and "C" Forms. However, the dealer failed to produce "C" Forms for a specific volume of sales, resulting in disallowance and taxation of that amount.

3. The dispute arose regarding the nature of the transaction, whether it was an out and out sale or a sale in transit, as the "C" Form could not be produced for the goods sold. The Tribunal, after reviewing the documents and evidence presented, concluded that the goods were directly delivered to the purchasing party without entering the State of Maharashtra, leading to the deletion of tax levy to that extent.

4. The Tribunal's decision was based on factual evidence and the documents presented, showing the movement of goods from one state to another without passing through Maharashtra. The Court found no legal question arising from the factual exercise conducted by the Tribunal and upheld the decision to delete the tax based on the admitted documentary evidence, dismissing the application as lacking merit.