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TMI Blog2008 (8) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that the alleged consignment transfers were in reality inter-State sales and subjected the said turnover to tax at 10 per cent in the absence of C forms. Penalty to the extent of three times the tax due on that turnover was also levied by a separate order under section 9(2) of the CST Act read with section 7A(2) of the APGST Act for furnishing false declarations/certificates. The A.P. Sales Tax Appellate Tribunal, by the impugned order, partly allowed the appeal (on a turnover of about Rs. 2.62 crores), partly dismissed the appeal (on a turnover of about Rs. 2.60 crores) and partly remanded the case to the assessing authority (in respect of a turnover of about Rs. 63 lakhs). The penalty was confirmed in so far as the disallowed turnover is concerned, i.e. Rs. 2,60,13,401. The appellant is a firm engaged in the business of manufacture and sale of vegetable oils. It is a registered dealer on the rolls of the Commercial Tax Officer, Rajendranagar circle, A. P. The appellant claimed that it dispatched the consignments of refined oil to its agents located in other States, viz., Tamil Nadu, Karnataka and Maharashtra for the purpose of effecting local sales in those States. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue) dated July 5, 2004 evolving a scheme for granting relief to the oil traders who have been similarly subjected to tax and penalty under the CST Act. By virtue of that G.O., the appellant voluntarily paid tax on a turnover of Rs. 3.16 crores at the rate of four per cent and also paid an equal amount of penalty; but, the Tribunal refused to grant any relief in terms of that G.O. as it had no statutory backing. On this aspect, no arguments have been advanced before this authority and therefore we need not delve into it. Now the question is whether the Tribunal was justified in dismissing the appeal in regard to the turnover of Rs. 2,60,13,401 comprising the alleged consignments made to 41 agents in other States. There is no dispute that if the alleged inter-State transfers to the appellant's agents for sale through the media of such agents is not established, such transactions are liable to be treated as inter-State sales clandestinely effected by the appellant. Such inference can be drawn either expressly or by necessary implication on the basis of the relevant material available with the assessing authority. Further, it is not in dispute that the enquiry reports ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of despatch of such goods. It is open to the dealer to discharge the burden of proof cast on him in any other manner by adducing other evidence. In case where the dealer exercises the option of furnishing declaration in form F, clause (2) of section 6A contemplated that the only further requirement is that the assessing authority should be satisfied after making such enquiry, as he may deem necessary, that the particulars contained in the declaration furnished by the dealer are true. In case there is dismal failure on the part of the dealer in the discharge of the burden so cast on him, the irresistible inference that there was a sale under the Central Act cannot at all be avoided. We may add that during the relevant assessment year, i.e., 2000-01, the filing of F form for the purpose of discharging the initial burden of proof cast on the dealer was not mandatory. The declaration in form F was only one mode of proving that the transactions were otherwise than by way of inter-State sales. It did not preclude the assessee from furnishing any other satisfactory proof to show that the inter-State movement of goods was not pursuant to a prior contract of sale and that such m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for from the second respondent, have not been furnished. Hence, we have no option but to refer to the substance of those reports, as set out in the orders of the assessing officer and Tribunal. The Sales Tax Appellate Tribunal, keeping the settled legal position in view, proceeded to discuss item-wise the contents of inquiry reports and hen the remarks made by the assessing authority. Thus far, the impugned order of the Tribunal cannot be faulted; but, the fundamental lapse on the (1)Sale means inter-State sale as defined in section 3 of CST Act. part of the Tribunal was the failure to record definite findings after adverting to the inquiry reports, etc. A typical paragraph in the order of the Tribunal gives an idea of the manner of disposal by the Tribunal and reveals the said infirmity. For instance, while dealing with item 11 at page 45, the Tribunal stated thus: The verification officer, i.e., Assistant Commercial Tax Officer, (Enft. Group-III), Salem informed in his letter addressed to the Deputy Commercial Tax Officer, Ferozguda that the agent has received 22 transactions out of 23 transactions from the assessee and denied one transaction. He also stated that, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 56, 57 and 64 (vide para 56 of the Tribunal's order) covering a turnover of Rs. 2,60,13,401 involving a tax of Rs. 26,01,340. It needs to be clarified here that the sum total of the turnover related to the above items in respect of which the appeal has been dismissed actually comes to Rs. 2,55,57,389. There seems to be a totalling mistake. Item No. 10: Swastik Traders, Kolhapur: Rs. 13,63,600 The STO (Enft., Kolhapur), in his communication dated November 20, 2003 (year wrongly noted as 1993 in the order of the Tribunal) stated that no dealer by the above name was doing business in oils. Further, he furnished a list of dealers bearing the same names who were on the rolls of Kolhapur ST offices dealing in various other commodities. Therefore, the assessing officer rightly commented that the F form and other documents said to have been issued by a non-existing dealer were obviously bogus. The appellant has not furnished any material to challenge this finding. Hence the order of the Tribunal is confirmed. Item No. 11: Sri Jayashakti Rice Oil Mill, Salem: Rs. 2,61,900 The ACTO (Enft.-III), Salem after verification repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we are inclined to reject the assessee's claim to the extent of Rs. 2 lakhs and allow the appeal in respect of a turnover of Rs. 16,14,771. Item No. 14: Chandradasan Salem: Rs. 5,08,595 ACTO (Enft.-V), Salem, reported that the alleged agent in his statement denied making the transactions relating to sale patti Nos. 5 and 6 and also the issuance of F form. Further the firm's name was changed to SRT Agro Foods with effect from August 10, 1999. Hence, the claim for exemption based on the above document is obviously not genuine. The appeal on this item is, therefore, dismissed. Item No. 15: Raja Ganapathi Traders, Salem: Rs. 7,74,200 ACTO (Enft.-V), Salem, furnished report to the effect that on verification it was found that 10 out of 14 consignments were received by the agent and admitted by him. Further, he reported that the agent denied three consignments relating to 3 sale-pattis and one F form. In the F form register produced by the dealer, F form No. 430126 was not found. However, the reasons for disallowing the entire claim are not discernible. On a reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the relevant F forms or sale pattis were shown to the dealer concerned and he denied the signatures thereon. A bare statement without corroborating evidence cannot be pressed into service to discredit the claim of the appellant. The possibility of the dealers (consignment agents) not disclosing their local sales of the consigned goods to avoid tax cannot be ruled out. Hence, at least a random check of accounts was necessary. It cannot be readily assumed that the statements given by those dealers are true and credible. Hence, we are inclined to allow the appeal in respect of the six items mentioned above. Item No. 18: Annamar Agencies, Erode: Rs. 2,67,812 ACTO (Enft.-V), Erode, reported that the dealer denied having received any consignments of oil from the appellant and having issued sale patties and F form. Moreover, the dealer started business in Erode only with effect from March 15, 2002. Hence, the claim was rightly disallowed and the dismissal of appeal on this item is upheld. Item No. 21: V.R. Gadda, Bidar: Rs. 3,94,520 The Commercial Tax Inspector, 1st Circle, Bidar, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also issued. Hence, the assessing authority rightly came to the conclusion that the claim of the appellant was based on fictitious documents. The dismissal of appeal by the Tribunal needs to be upheld. Item No. 30: Pusthi Refineries Pvt. Ltd., Tumkur: Rs. 26,01,200 The finding of the assessing officer that the F form furnished by the appellant was bogus is based merely on a letter dated November 21, 2003 addressed by the dealer to the DCTO, Rejendranagar, Hyderabad wherein he stated that he bought SFR oil from the appellant on inter-State purchase basis and that the transactions were accounted for by him. It does not appear that the contents of the letter have been verified by any sales tax official with reference to the accounts of the said dealer. Going by what is contained in the assessment order and the Tribunal's order, the dealer did not furnish any comment on the F form filed by the appellant in support of its claim. Moreover, it looks improbable that the appellant, if he had sold the oil by way of inter-State sale, would refrain from collecting C form from the purchasing dealer. C form entitles the seller to pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m: Rs. 7,64,567 The CTO, Anantapatti Circle, Salem reported that the above dealer is not an existing dealer and he reported stoppage of business since September 30, 1998. In view of this categorical report, the conclusion of the assessing authority that the appellant's claim was bogus cannot be faulted. Hence the appeal is dismissed with respect to this item. Item No. 39: Manjunath Distributors, Bellary: Rs. 4,52,338 The CTO (lntell.II), Bellary in his letter dated December 1, 2003 stated that the dealer closed down the business and his whereabouts were not known. It is not clear from the report that the said dealer did not carry on the business at all during the year 2000-01 and that the appellant did not have any transaction with him during that year. It may very well be a case of the dealer not disclosing the agency sales and paying local tax. Hence, the assessing authority had no material to conclude that the sale pattis and F form were fake documents. The appeal on this item is, therefore, allowed. Item No. 40: Abhay Trading Co. Jalna: Rs. 2,49,271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the STO, Nasik reported in his letter dated : Rs. 14,13,415 November 28, 2003 that the above dealers did not pertain to his office. On the basis of such cryptic report, the assessing authority was not justified in reaching the conclusion that the appellant did not have any transactions with them and that the documents filed by the appellant were bogus. It is not clear whether the registration certificates of the said dealers (as mentioned in the F forms, etc.) could have been issued by some other STO of Nasik town. The enquiry report is not conclusive. Hence, the rejection of the appellant's claim is not justified. The appeal is allowed in respect of these items. Item No. 51: Parth Trading Company, Nasik : Rs. 5,52,155 Item No. 52: Sunraj Traders, Nasik : Rs. 2,61,900 Item No. 53: Tapowan Traders, Nasik The sales tax registration numbers of the dealers mentioned in the appellant's documents did not pertain to those alleged agents, but they were allotted to other named dealers. To this effect, the STO, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of records was done. Hence, the appeal ought to be allowed in respect of this item. It may be clarified that in respect of this item, the assessing authority merely deleted the duplication of turnover, but rejected the appellant's claim for exclusion. The net result of the above discussion is that the appellant is entitled to a relief of Rs. 1,24,86,934 over and above what the Tribunal allowed/ remanded. The said figure goes out of the turnover on which the Tribunal dismissed the appeal, i.e., Rs. 2,55,57,389(1). Accordingly, the appeal against assessment is allowed and the assessing authority is directed to give effect to the same. Penalty was levied, as already noted, under section 9(2) of the CST Act read with section 7A(2)(i) of the APGST Act. It reads as follows: 7A(2) Where a dealer issues or produces a false bill, voucher, declaration, certificate or other document with a view to support or make any claim that a transaction of sale or purchase effected by him or any other dealer, is not liable to be taxed or is liable to be taxed at a reduced rate, the assessing authority shall, on detecting such issue (1)See paragraph 14. or production, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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