2018 (11) TMI 1358 - HC - VAT and Sales Tax

Rejection of the claim of inter-state purchases on commission basis - issuance of Form-H - Whether the Tribunal has erred in rejecting the claim of interstate purchase of wheat (made on commission basis) on extraneous material and application of wrong principle? Held that - In the first place, the absence of the export order placed on the ex-U.P. Principal, was wholly irrelevant and extraneous for the purpose of the adjudication of the present case. Insofar as the absence of the purchase order is concerned, learned counsel for the assessee submits that the same was admittedly on record and the Tribunal has erroneously recorded a finding that the purchase order was not made available to the farmers/unregistered dealers. As to the point whether the details in the Satti Bahi is otherwise complete, the fact that the books of account of the assessee has been accepted and the further fact that there is no specific finding recorded as to any defect in the books of account of the assessee, that point has to be treated as one decided in favour of the assessee. As to the first issue being whether the names of the farmers were recorded with all details and its impact, it has only to be stated to be accepted that once it was admitted that the assessee had made purchases from unregistered dealers/farmers, Form-H - Held that - Though it is true that a claim of the export sale cannot co-exist with the claim of interstate purchase of wheat on commission basis, both claims arising in the hands of the same assessee, however, it is to be seen whether the nature of transaction performed by the parties would get altered or determined solely upon issuance of Form- H - If the evidence was found to be unbelievable or false or wrong or doubtful, that issue may have been further examined in the context of Form-H. Even in that regard, it may remain relevant to consider whether the Ex-U.P. Principal/Exporter has been examined by the assessing officer - the Tribunal has misdirected itself while considering the claim raised by the assessee. Revision allowed - The matter is remitted to the Tribunal to pass a fresh order strictly in accordance with law.

Summary

Issues Involved:
Claim of interstate purchase of wheat on commission basis for A.Y. 2004-05.

Detailed Analysis:

1. Claim of Interstate Purchase of Wheat on Commission Basis:
The applicant-assessee filed a revision for the assessment year 2004-05, raising questions of law regarding the rejection of the claim of interstate purchase of wheat on commission basis by the Tribunal. The applicant supported the claim with receipts of purchase under Mandi Adhinium on Forms 6-R and bills of sale on Forms 9-R. The applicant contended that the Tribunal erred in rejecting the claim based on irrelevant details such as the absence of complete farmer details and issuance of Form-H by the ex-U.P. Principal. The applicant argued that the Tribunal misunderstood the nature of the transaction and failed to consider the evidence presented, including the purchase orders from the ex-U.P. Principals.

2. Examination of Tribunal's Decision:
The Tribunal considered various points, including completeness of farmer details, description of goods in the "Satti Bahi," absence of purchase order with the applicant, and absence of export order with the ex-U.P. Principal. The Tribunal's focus on irrelevant factors like export orders and incomplete farmer details was deemed inappropriate. The acceptance of the applicant's books of accounts and lack of specific findings against them favored the applicant. The Tribunal's emphasis on technicalities regarding farmer details was criticized as unnecessary, given the availability of purchase details in the documents provided by the applicant.

3. Relevance of Form-H and Nature of Transaction:
The Standing Counsel argued that issuance of Form-H by the exporter to the assessee disproved the claim of commission sale. However, the nature of the transaction should be determined based on evidence at the time of purchase and dispatch, not solely on Form-H. The Tribunal's reliance on Form-H was deemed misplaced, as it should have first considered the evidence presented by the applicant. The possibility of examining the credibility of evidence in light of Form-H and the examination of the ex-U.P. Principal were highlighted as relevant factors in determining the transaction's nature.

4. Conclusion and Decision:
The Court found that the Tribunal misdirected itself in considering the applicant's claim. The revision was allowed in favor of the assessee, setting aside the previous order and remitting the matter to the Tribunal for a fresh decision within a specified timeframe. The Court clarified that no fresh opportunity for evidence would be granted, emphasizing the need for a prompt resolution of the case.

This detailed analysis highlights the key arguments, considerations, and conclusions of the judgment regarding the claim of interstate purchase of wheat on commission basis for the assessment year 2004-05.