2018 (4) TMI 1381 - HC - VAT and Sales Tax

Revision of assessment order - stock transfer - suppression of facts - Whether the Tribunal has committed a manifest error of law and facts to uphold the evaded sales of 1524 grams Paclitaxel @ 29, 000/- per gram amounting to 4, 41, 96, 000/- excise duty 58, 12, 374/- 5, 00, 08, 374/- and to levy tax thereon @ 8% amounting to 40, 00, 699.92? At the time of original assessment proceedings the assessee disclosed stock transfer of 178, 56, 45, 444/- and also filed 254 Form F to establish stock transfer. He had not disclosed the manufacture and sale or alleged stock transfer of Paclitaxel during the course of original assessment proceedings. This Court specifically asked the learned counsel for the revisionist-assessee yesterday and today also to point out from any evidence that the assessee has disclosed the manufacture and sale or the alleged stock transfer of Paclitaxel during the course of original assessment proceedings - it is a clear case of suppression of manufacture and disposal of the goods in question i.e. Paclitaxel . It appears that during the course of arguments before the Tribunal the assessee took the stand that the stock transferred quantity is 1050 grams instead of 1040 grams and the donated quantity is 31 grams instead of 25 grams. The Tribunal considered the entire facts and evidences on record and recorded a finding of fact that there was no stock transfer and Form F procured by the revisionist-assessee from its unit situate at Baddi District - Solan on 24.11.2003 is merely to cover up the evasion - The Tribunal has given sufficient reasons to disbelieve the contention of the revisionist and to uphold the findings of the Assessing Authority and the 1st Appellate Authority - The assessee took a vague stand before the Tribunal merely in written argument that balance quantity of 443 grams Paclitaxel has either been used in production or it is available in stock. The assessee could not substantiate his claim from the books of accounts. An analysis of the relevant provisions of the Section 6A of Central Sales Tax Act and the Rules framed thereunder shows that the initial burden of proof is on the dealer to show that the movement has occasioned by reason of transfer of such goods which is otherwise than by reason of sale. The explanation of the assessee with regard to non disclosure of the alleged stock transfer of 1040 grams or 1050 grams Paclitaxel during the assessment proceedings that he was under impression that the goods which are being stock transferred are not necessary to be disclosed was found to be groundless inasmuch as perusal of the assessment order shows that during the course of the assessment proceedings the assessee disclosed stock transfer of certain other goods amounting to 178.56 crores and also filed 254 Form - F in original to claim stock transfer - No legally acceptable ground has been made out by the assessee to require this Court to interfere with the findings of fact for not accepting the alleged stock transfer of the goods in question. The impugned order of the Tribunal requires no interference by this Court in revisional jurisdiction under Section 11 of the U.P. Trade Tax Act 1948 - Revision dismissed - decided against assessee.

Summary

Issues Involved:
1. Whether the Tribunal committed a manifest error of law and facts in upholding the evaded sales of 1524 grams of 'Paclitaxel' and levying tax thereon.

Issue-wise Detailed Analysis:

1. Tribunal's Error in Upholding Evaded Sales:
The primary issue was whether the Tribunal erred in upholding the evaded sales of 1524 grams 'Paclitaxel' valued at ?5,00,08,374/- and levying tax at 8% amounting to ?40,00,699.92. The revisionist-assessee challenged the Tribunal's decision, arguing that 1050 grams of 'Paclitaxel' were stock transferred to its unit in Baddi, Himachal Pradesh, supported by invoices and G.R., and thus, there was no sale. The assessee also claimed that the valuation adopted by the Sales Tax Authorities was incorrect as it did not consider the figures declared in the invoices but rather those determined by the Central Excise Authorities. Additionally, the assessee contended that once Central Excise Duty was paid on the stock transfer quantity, it could not be considered a sale, and no inquiry was conducted by the Sales Tax Department to disprove the stock transfer.

Findings and Discussion:
The court found that the assessee did not disclose the manufacture and sale or alleged stock transfer of 'Paclitaxel' during the original assessment proceedings. The assessee's claim of stock transfer was not substantiated with reliable evidence. The Assessing Authority concluded that the entire quantity of 1524 grams 'Paclitaxel' was sold within the state, based on the assessee's own bill and the Central Excise Department's report valuing 'Paclitaxel' at ?29,000/- per gram. The Appellate Authority and the Tribunal upheld this finding, noting discrepancies and contradictions in the assessee's claims regarding the mode of transportation and the alleged donation of 'Paclitaxel' to Dabur Research Foundation.

Legal Precedents:
The court referred to the Supreme Court's interpretation of Section 6A of the Central Sales Tax Act, which places the burden of proof on the dealer to show that the movement of goods was a stock transfer and not a sale. The court emphasized that the assessee failed to meet this burden, and the findings of fact by the statutory authorities were based on relevant material and evidence. The court also noted that suppression of material documents amounts to fraud on the authorities.

Conclusion:
The court concluded that the Tribunal did not commit any error of law in upholding the determination of evaded sales turnover of 1524 grams 'Paclitaxel'. The findings of fact were supported by substantial evidence, and the assessee's explanations were found to be groundless. The revision was dismissed, and the question of law was answered in favor of the opposite party.