2018 (8) TMI 350 - HC - VAT and Sales Tax

Levy of Trade Tax - Stock Transfer of Goods - submission of statutory Form F - inter-state sale or not. Whether, on the facts and in the circumstances of the case, Stock Transfer of Goods and submission of statutory Form F attracts Trade-tax? Whether, on the facts and in the circumstances of the case, the Form F would be considered conclusive proof of Stock Transfer? Whether, on the facts and in the circumstances of the case, Stock Transfer can be considered Inter-State Sale, without any cogent reason? Held that - The Revisionist exercised its option of submitting Form-F issued by the Principal Officer of the other place of business i.e. Jaipur, before the Assessing Authority in the State of U.P. Based on it, it was contended that this was conclusive proof that the transactions were Stock Transfer and unless the particulars mentioned in Form-F were belied or proved to be wrong, incorrect, fraudulent, the Assessing Authority was bound to have treated the transaction as having been occasioned otherwise than as a result of Sale i.e. as Stock Transfer which was not liable to be taxed - The submission of Form-F by itself does not raise any un-rebutable or conclusive presumption regarding the transaction(s) being Stock Transfers - In the present case Form-F was not accepted by the Assessing Authority while exercising his power under Section 6-A(2), albeit at the time of assessment. In the case at hand after the matter was remanded back by the order of the Tribunal dated 26.09.2005, a show cause notice was sent to the Revisionist asking it to appear along with the original records, account books, the details of Stock Transfer to Jaipur and to get the same verified from the said account books but inspite of this notice the Revisionist did not produce the said records. All that was produced was a copy of the statement of accounts sent by the Clearing and Forwarding Agent from Jaipur. Each individual transaction of Stock Transfer was required to be verified and this could be done only from the relevant record requisitioned by the Assessing Authority and not otherwise. No reason cogent reason was put-forth by Sri Sachdeva for the non-production of records except to say that it was not required as Form-F was condusive proof of the transactions being a Stock transfer not an Inter-State sale, which, for the reasons already discussed, is untenable in law.In these circumstances if the Assessing Authority rejected the declaration submitted by the Revisionist in form-F and treated the transaction as Inter-State Sale liable to tax, he cannot be faulted nor can the First Appellate Authority and the Tribunal be faulted on this account - In the present case no plausible reason has been given by the Revisionist for non-production of the account books and other records as requisitioned by the Assessing Authority. Though, the scope of inquiry under Section 6-A(2) is limited to the veracity of the particulars mentioned in Form-F, the nature of the inquiry could encompass the requisitioning of relevant records and the IInd Ashok Leyland case does not lay down any proposition of law to the contrary. A case involving claim under Section 6-A of the Act stands on a different footing than the case of an Inter-State sale against Form-C. Thus, Stock Transfer of Goods and submission of statutory Form F attracts Trade-tax - the Form F would not be considered conclusive proof of Stock Transfer - the burden to prove that the transaction was of transfer of goods otherwise than by way of Sale was on the Revisionist-dealer and for the reasons aforesaid this burden was not discharged consequently the transaction has rightly been deemed to have been a Sale Inter-State as per Section 6-A(2) of the Act, 1956. Revision dismissed - decided against Revisionist.

Summary

Issues:

1. Whether Stock Transfer of Goods and submission of statutory Form 'F' attracts Trade-tax.
2. Whether Form 'F' would be considered conclusive proof of Stock Transfer.
3. Whether Stock Transfer can be considered Inter-State Sale without any cogent reason.
4. Whether Animal Health Products/Cattle Feed are covered by Notification No.ST-2-7036/10-7( ) 23-83 dated 31.01.1985.

Issue-wise Detailed Analysis:

1. Whether Stock Transfer of Goods and submission of statutory Form 'F' attracts Trade-tax:

The court examined whether the submission of Form-F under Section 6-A(2) of the Central Sales Tax Act, 1956, read with Rule 12(4) of the Central Sales-tax (Registration and Turnover) Rules, 1957, constitutes conclusive proof of stock transfer and thus exempts the transaction from being taxed as an inter-state sale. The court noted that the Assessing Authority did not accept the particulars mentioned in Form-F and treated the transaction as an inter-state sale, imposing a tax liability. The Tribunal and subsequent appellate authorities affirmed this view, emphasizing the necessity of verifying the particulars in Form-F against original documents and account books, which were not produced by the revisionist.

2. Whether Form 'F' would be considered conclusive proof of Stock Transfer:

The court held that the submission of Form-F by itself does not raise an irrebuttable or conclusive presumption regarding the transaction being a stock transfer. The judgment of the Supreme Court in the IInd Ashok Leyland case clarified that an order accepting Form-F under Section 6-A(2) raises a conclusive presumption, but mere submission of Form-F does not. In the present case, the Assessing Authority did not accept Form-F at the time of assessment, and thus, the principle of finality of an order accepting Form-F did not apply. The court emphasized that the burden was on the dealer to prove the particulars mentioned in Form-F and to produce relevant records for verification, which the revisionist failed to do.

3. Whether Stock Transfer can be considered Inter-State Sale without any cogent reason:

The court observed that the burden of proof under Section 6-A of the Act, 1956, lies on the dealer to establish that the transaction was a stock transfer and not a sale. The dealer must furnish Form-F and other relevant evidence. In this case, the revisionist did not produce the necessary account books and records despite notices from the Assessing Authority. The court held that the Assessing Authority was within its jurisdiction to reject Form-F and treat the transaction as an inter-state sale due to the non-production of records. The court cited various judgments that affirmed the necessity of verifying the particulars in Form-F and the dealer's obligation to produce relevant documents.

4. Whether Animal Health Products/Cattle Feed are covered by Notification No.ST-2-7036/10-7( ) 23-83 dated 31.01.1985:

The learned counsel for the revisionist did not press the revision on this question, and thus, the court did not consider this issue.

Conclusion:

The court answered the first question in the affirmative, the second question in the negative, and upheld that the burden of proof was on the dealer to establish the transaction as a stock transfer. The revisionist failed to discharge this burden, leading to the transaction being deemed an inter-state sale. The fourth issue was not pressed, and the revision was dismissed.