2017 (3) TMI 1063 - HC - VAT and Sales Tax

Liability of tax - transfer of stock was not backed by any Form-F - The assessing authority was of the opinion that there exists a statutory presumption of sale, unless such transfer beyond the State was backed by Form-F - whether mere absence of Form-F would be conclusive that the sale has taken place justifying demand of tax? - Held that - The provision is categorical and clear, inasmuch as any transfer of stock, which is not backed by Form-F, would be deemed for all purposes to have been occasioned as a result of sale - Prior to its amendment in the year 2002, such statutory presumption of sale was apparently not in existence - Once a statutory presumption is drawn regarding sale in the absence of Form-F, and the assessee has not been able to put forth any material, which may have been responsible for non-submission of Form-F, the first appellate authority and the tribunal were not justified in interfering with the order of assessing authority, holding the assessee liable to payment of tax - demand justified - revision disposed off.

Summary

Issues:
Challenge to deletion of tax amount due to absence of Form-F.

Analysis:
The case involved a challenge to the deletion of tax on a turnover amount due to the absence of Form-F. The dealer, engaged in the business of readymade garments, claimed to have returned stock to a principal outside the state without Form-F. The assessing authority disallowed the claim, citing Section 6-A of the Central Sales Tax Act. The first appellate authority and Tribunal, however, allowed the appeal, relying on precedents like M/s Ambica Steels Ltd. vs. State of U.P. The revenue challenged this decision, arguing that the statutory presumption of sale in the absence of Form-F should apply. The court noted the clear provision of Section 6-A(1), which deems stock transfer without Form-F as a sale. The court emphasized that any decision pre-dating the 2002 amendment to Section 6-A would not be relevant.

The court discussed the judgment in M/s Ambica Steels Ltd., where the Supreme Court allowed re-assessment upon submission of Form-F, but clarified that the absence of Form-F would not lead to penalty or interest in certain circumstances. The court distinguished this case from the present matter, where Form-F was never applied for. The court held that the absence of Form-F, coupled with the failure to provide any material justifying its non-submission, rendered the dealer liable for tax payment. The court concluded that the first appellate authority and Tribunal erred in interfering with the assessing authority's order. Consequently, the revision was disposed of in favor of the revenue, upholding the liability of the dealer to pay tax on the turnover amount.