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2020 (3) TMI 7 - HC - VAT / Sales TaxTaxability under CST Act - goods transfer in question supported by F Form - HELD THAT - Reliance placed in the decision in the case of M/S. ADVANCE PAINTS (P) LTD. VERSUS THE COMMERCIAL TAX OFFICER, THE SALES TAX APPELLATE TRIBUNAL (ADDL. BENCH) 2019 (12) TMI 540 - MADRAS HIGH COURT where it was held that merely on the assumption or presumption of any such kind of pre-existing contract, the Assessing Authority could not have imposed the tax under the provision of Central Sales Tax Act. Since necessary documents and evidence were already furnished before the Assessing Authority himself, furnishing of the same again before the Appellate Authorities was not at all called for. And therefore, on this premise, the Appellate Authority should not have confirmed the finding of the Assessing Authority that the Assessee is liable to pay tax under the Central Sales Tax Act. There is no error in the order of the learned Tribunal and the finding of fact recorded by the learned Tribunal does to require any interference in this writ petition filed by the Revenue - Petition dismissed.
Issues:
1. Interpretation of provisions of Central Sales Tax Act, 1956 regarding taxable goods transfer. 2. Assessment of tax liability based on movement of goods and pre-existing contracts. 3. Validity of documents like Form F declarations and Form XX's in establishing tax liability. Issue 1: Interpretation of provisions of Central Sales Tax Act, 1956 regarding taxable goods transfer: The High Court analyzed the order of the Tamil Nadu Sales Tax Appellate Tribunal, which held that the goods transfer supported by "F" Form is taxable under the Central Sales Tax Act. The Tribunal found that the Department failed to point out any discrepancies in the Form F declarations. The Court emphasized that the movement of goods against a particular order or direction is essential to impose tax under the CST Act. It was noted that the Assessing Officer's grounds for rejection were not legally valid as they were not based on concrete findings. The Court highlighted the importance of documents like Form XX's as legal documents of transportation and emphasized that unless the authorities could conclusively prove a contrary finding based on their own verification, an assessment cannot legally arise on the turnover. Issue 2: Assessment of tax liability based on movement of goods and pre-existing contracts: The Court considered the case where the Assessing Authority imposed tax under the CST Act based on the assumption of a pre-existing contract for inter-state sale. However, the Court held that necessary proof of movement of goods and Form "F" were already provided by the Assessee to the Assessing Authority. The Court emphasized that the mere presumption of a pre-existing contract without documentary evidence is unfounded. It was clarified that the movement of goods from one State to another in pursuance of a pre-existing contract is necessary to treat a sale as an inter-state sale for tax purposes. The Court concluded that the Appellate Authority should not have confirmed the tax liability finding based on assumptions without concrete evidence. Issue 3: Validity of documents like Form F declarations and Form XX's in establishing tax liability: The Court highlighted the importance of documents like Form F declarations and Form XX's in establishing tax liability. It was noted that the Assessee had furnished Form "F" and documents of transportation, which should have been considered unless the authorities could conclusively prove a contrary finding. The Court emphasized that the Assessing Officer's findings were legally invalid as they did not provide concrete evidence to create a tax liability on the dealer. The Court referred to precedents emphasizing the duty of the Revenue to establish inter-state sales and concluded that the assessment on the turnover was not legally valid and set it aside. In conclusion, the High Court allowed the Writ Petition, set aside the order of the Sales Tax Appellate Tribunal, and dismissed the Revenue's petition, finding no error in the Tribunal's order and no merit in the Revenue's claims.
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