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TMI Blog2000 (1) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... e questions have been raised: (1) Whether, on the facts and in the circumstances of the case, the Karnataka Appellate Tribunal is right in law in allowing the appeals filed by the respondentcompany? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in treating the interState sales as branch transfer? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in treating the turnover of interState sales as branch transfers on the ground of test of reasonableness? (4) Whether, on the facts and in the circumstances of the case, the impugned order is sustainable in law? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in not considering all the documents produced by the department?" 3.. (a) Whether there is suppression: Learned counsel for the department has drawn our attention to annexure "C" letter dated March 23, 1991 written by M/s. Arya Central Transport Ltd., Bangalore, to their Delhi office, in which, it was mentioned that the consignments were despatched without any other documents, and freight was paid at Bangalore. In annexure "D", the Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques. (e) that the said challans No. at (b) above were asked to be treated as consignment note numbers by the Bangalore ACTL office. (iii) in a statement made before the ACCT (CV) S.Z. Bangalore Shri Kamlesh N. Gaind has confirmed that the contents of this letter are true and correct. (iv) Further Shri G.D. Agarwal, Administration incharge of ACTL, New Delhi, in his statement made before the Central Excise authorities, at Delhi, on July 26, 1994 has also confirmed that the said six consignments were assessee's goods and that they were transported without any documents." 4.. The assessing authority has estimated the suppressed turn over from 199091 to 199394 and has also taken into consideration all these documents. 5.. Assessing authority came to conclusion that, assessee was despatching two loads with identical quantities by mentioning one and the same consignment number and accounting only one load. This conclusion was arrived on the basis of annexure "B". In respect of one consignment, different lorry numbers were found on challan and lorry receipt. The statement of General Manager that if some of the lorry challans contained two dates, it was because the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained that the technical people exercising super vision over production of aluminium extrusions account for the entire production including the defectives which are reprocessed for conver sion into aluminium extrusions. Aluminium extrusions derived from the reprocessing are also taken to account by the technical people as production. In consequence, one and the same quantity of aluminium extrusions first derived as defective and on reprocessing derived as marketable quality extrusions, gets accounted twice. It is such a difference between the net and actual production taken to balance sheet and the total production accounted by the technical people that was narrated in the note of the then company Secretary, Sri R.S. Bajaj." It was also observed by applying test of reasonableness, the assessee could not have camouflaged alleged few transactions of sales. 5A. So far as the finding on question of suppression is concerned, basically, it is a question of fact and in revision, it has to be seen as to whether the view taken by the Tribunal is absolutely perverse, illegal or without jurisdiction or suffers from any mistake apparent from the record or error of law. Nothing has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company manufactures dies as per specifications and the specific sections are manufactured and sold in the course of interState trade by collecting four per cent Central sales tax. The interState sales are effected to dealers of Delhi, Bombay and Hyderabad though the company has branch offices in those places. (c) The manufacturing activity of general sections and despatches of general sections to the branches on stock transfers are in the usual course of business and are as part of daily routine. Hence, goods are stock transferred as and when manufactured in full truck loads. (d) The branches at Delhi, Bombay and Hyderabad are registered in the respective States and are having sufficient storing facilities (godown available). The copies of the registration certificates mentioning godown facilities are filed by the appellant which are taken on records. The proof of payment of rent for branches and godown are also filed. (e) The branches at Delhi, Bombay and Hyderabad, after receipt of the goods from Bangalore and after taking delivery of the goods, sold the goods in open market to the wholesalers at the respective cities of Delhi, Bombay and Hyderabad. The branches maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material." Following negative facts were found: (a) Receipt of advance by the manufacturing units or its communication to manufacturing unit. (b) Payment of freight upto the destination of the ultimate buyer. (c) Obtaining of insurance and the destination upto which transit insurance has been covered by the despatching unit. (d) Extent of presence of stock and pattern of stocking at branch. (e) Delivery instructions to the transporters. (f) Existence or nonexistence of branch. (g) Possibility of indication of ultimate buyer in the delivery challan. (h) Presence of packing indicating the ultimate consignee thereby disabling the branch from diverting goods. Assessing authority relied on the decision reported in Mehta Group of Industries v. State of Haryana [1989] 75 STC 428 (P H) and Haryana Iron and Steel Rolling Mills v. State of Haryana [1990] 77 STC 211 (P H) which was distinguished by the assessee as under: Sl. No. Mehta Group case Appellant's case 1. Goods despatched from Goods are transferred from factory at Bahadurgarh in Haryana Bangalore to the branches at Delhi, to DelhiWhich is only Bombay and Hyderabad, i.e., different about 30 kms. distance parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llan. Proper ack nowledgement was taken from the dealers/customers in the copy of the challan for having delivered the material. The lorry receipts of the transporter also clearly show that the freight charges are inclusive of the unloading charges at the branch godown. 10. The assessee despatched goods to The goods were despatched in full the branches in small consignments truck loads from the factory to the of 15 kg/20kg and sold the same to branches and in most of the cases two different customers in two goods have been sold to more than different lots even though received one buyer. on same day. There were even two consignments of small quantities on one day. 11. Goods have been sold to one customer In more than 90 per cent of the only and in two cases goods have been cases goods have been sold to sold to two customers. more than one customer. Sl. Haryana Iron Steel Rolling Appellant's case No. Mills case 1. Goods were despatched to branch Goods are taken into stock at the on full lorry loads and they were branches. In view of the demand disposed of on the same day at the for the products, goods are sold branches. afterwards at an average of 2 to 3 days after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its burden of in existence. Provisions of section proof that the transfer of goods was made 6A of the CST Act was inserted otherwise than by way of sale by furnishing with effect from April 1, 1973 only. before the assessing authority, particulars Hence, based on the above facts, the in form F, along with evidence of despatch High Court has decided the matter. of such goods. The particulars and evidence have been accepted by department and appellant's assessments have been comple ted by assessing authority. 6. Delhi to Hisar is only four hours In our case, it takes 4 to 8 days, documents journey. Material reach the branch and details reach the branch next day by along with the details itself. courier, i.e., much before the receipt of material at branches giving enough time to contact customers and obtain orders." 8.. Observations of the following para of the decision of this Court in Bhoruka Steel Rolling Mills Ltd. v. State of Karnataka S.T.A. No. 37 of 1977, dated February 4, 1981, were relied which reads: "As on each occasion the goods were despatched by the appellant to the branch office in lorry, the movement came to an end when the lorry reached the branch office. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ched by the appellant were moved by it in the ordinary course of business. The mere fact that the mark of the Andhra Pradesh buyer's name was found on the goods would not necessarily lead to the conclusion that there was a completed transaction of sale by the appellant in Madras by appropriation of goods towards any contract. Therefore, the transaction was not to be regarded as representing interState sales effected by the assessee. (ii) Kelvinator of India Ltd. v. State of Haryana [1973] 32 STC 629 (SC): M/s. Kelvinator of India Ltd. had its factory in Haryana State, where it manufactured refrigerators, deep freezers, etc. The company operated its registered office and sales office at Delhi and it had entered into three distribution agreements with three different dealers. The three different dealers placed their purchase orders only after the goods reached the head office in Delhi. The honourable Supreme Court of India held that the three distribution agreements were not agreements of sale between the parties and therefore, it could not be said that the movement of goods from Haryana to Delhi was under any contract of sale. Transactions between Kelvinator of India Ltd., and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana [1990] 77 STC 211 do not have any applicability to the facts in the case of the appellant. Except to have pressed into service the judg ment of the honourable High Court of Punjab and Haryana in the aforesaid two cases, no material evidences whatsoever have been brought on record of the reassessment orders to establish existence of any nexus between the despatches accounted as stock transfers and sales effected by the branches. It is now wellsettled by consis tent judgments of honourable High Courts and honourable Supreme Court of India that merely by reason of identicalities in respect of de scription of goods, quantity and value between the despatches made to branches and sales effected by the branches even on the same day of receipt of goods at branches, it cannot be held that the despatches constitute transactions of interState sales liable to Central sales tax. We have no hesitation therefore, in reaching the conclusion that the case against the appellant for having camouflaged any transaction of interState sales into branch transfer is not proved." 10.. It is submitted that, an inference could be drawn that the goods moved, in pursuance of the contract of sale from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, quantity and value between the des patches made to the branches and sales effected by the branches on the same day, cannot be considered to be the interState sale. This conclusion of the Tribunal cannot be considered to be against the provisions of law and various decisions relied. In view of the decision of Commissioner of Sales Tax v. Suresh Chand Jain [1988] 70 STC 45 (SC) the burden to prove the transaction as interState was on the assessing authority which has failed to prove the same. In Larsen and Toubro Ltd. v. State of Karnataka STA 392 of 1993, it was held that in Haryana Iron and Steel Rolling Mills v. State of Haryana [1990] 77 STC 211 (P H), Mehta Group of Industries v. State of Haryana [1989] 75 STC 428 (P H) cannot be applied blindly without scrutiny of facts. In these circumstances, looking to the facts of the present case, the Tribunal was justified in not following the decisions given in Haryana Iron and Steel Rolling Mills v. State of Haryana [1990] 77 STC 211 and Mehta Group of Industries v. State of Haryana [1989] 75 STC 428 and we do not consider that any case for interference in revisional jurisdiction is made out. Sales tax revision petition is acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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