9911796707
TMI Blog2009 (1) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... il Nadu General Sales Tax Act, 1959 and passed an order on March 8, 2000 rejecting the applicant's claim for exemption and subjecting to tax the entire turnover of Rs. 3,30,70,955 shown as stock transfers and demanded the tax of Rs. 55.12 lakhs. The fourth respondent held that the alleged stock transfers were really in the nature of inter-State sales. The assessing authority also levied penalty at 1 times the tax due purportedly under section 12(3)(b) of the TNGST Act. The appellant could not succeed in the first appeal filed before the Appellate Assistant Commissioner and in the second appeal preferred to the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Chennai. The revised assessment including levy of penalty was upheld. The reason for initiating reassessment proceedings is the alleged incriminating material detected at the time of inspection of Salem factory on October 26, 1995 and Chennai office on November 19, 1997 by the Enforcement Wing of the Department. At the outset, the learned counsel for the appellant pointed out that inspection took place much earlier to the original assessment order wherein the appellant's claim was accepted and no fresh ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order passed on December 28, 1997. However, we find from the counter-affidavit filed by the fourth respondent that the F forms were produced for the first time on January 31, 2000 after the revision notice was issued. The fourth respondent categorically denied that F forms were produced even at the time of original assessment. That being the factual position, the ratio of the decision in Ashok Leyland [2004] 134 STC 473 (SC) has no application to the present case. It was only subsequent to the original assessment order that F forms were filed and the assessing authority in the course of reassessment proceedings, did not accept them. The assessing authority negatived the appellant's claim of stock transfers on the basis of material adverted to by him. In these circumstances, the reference to the decision of the Supreme Court in Ashok Leyland [2004] 134 STC 473 is quite irrelevant. Now we shall turn our attention to the findings recorded by the Tribunal on merits. These findings are substantially a repetition of what is stated in the assessment order. In this regard, paragraphs 13 and 14 of the Tribunal's order are extracted to come to the grips of the core issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on an estimate on the basis of study of the local market trends. There must be definite evidence to establish that the ice-creams on inter-State journey were earmarked to a particular customer or customers in the other State pursuant to firm orders accepted by the branch or head office. The Tribunal observed that the head office in Chennai received confirmed orders placed by various parties on advance payment either by cheque or DDs and the same were communicated by the branches. This is nothing but a broad generalization. No specific orders placed by any of the customers in Bangalore or Trichur have been referred to by the assessing authority nor did the assessing authority refer to any evidence of advance payment of amount by the customer in the other State. What all is stated in the stock transfer note is that the payment should be made through cheques or DDs drawn in favour of the appellant's head office at Chennai. This does not mean that the prospective customers paid advance against confirmed orders. The condition in the stock transfer note was only in the nature of instruction to the branch as to how the sale proceeds have to be remitted. Secondly, the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is given though the name of the particular customer hosting the party is not mentioned. From that, an inference was drawn that the branches received firm orders for the supply of ice-creams for the parties to be held on particular dates by the concerned customers. On perusal of the order forms seized by the Enforcement Wing, we have also noticed such endorsements on some of the order forms. The assessing authority has given the details of such dispatches/stock transfers culled out from the order form books marked A and B . In a few instances there is even indication of the customers' names. The total value of such transactions with the endorsements bearing party on dated... was arrived at Rs. 80,15,204. The assessing authority, before detailing the figures, stated that out of the purchase orders, wherever there is specific mention about party date and place, these orders are tabulated as follows... .A contention has been raised by the learned counsel for the appellant that even this turnover cannot be treated as inter-State sales as the mere endorsement party on on such and such a date does not necessarily lead to the inference of a prior confirmed order from the out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... movement commenced. However, the sweeping observation of the assessing officer and the Tribunal that all the goods received by the branch office were directly transferred to Hatsun Milk Foods Ltd., is not correct. It is not the case of the department that the entire sales were made to that particular party. The appellant has filed two volumes containing the details of the goods received and sold by the branches on certain dates and copies of invoices of the branches. It shows sales having been effected to various parties other than Hatsun Milk Foods Ltd., even on the dates when the icecreams were sold to Hatsun Milk Foods Ltd. There is evidence in the form of invoices, etc., to show that the branch sold ice-creams to other parties as well on the same day. Moreover, the details filed by the appellant indicate that some stocks were held by the branches for a few days before sale. Therefore, a broad generalization by the assessing authority and the Tribunal is not correct. To the extent that the goods were sold to Hatsun Milk Foods Ltd., the finding of the assessing authority as well as Tribunal that it was a case of inter-State sale cannot be faulted. But, we do not find the exac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Section 12(3)(b) which applies to levy of penalty in the context of original assessment has been wrongly quoted. In fact this was taken note of by the Tribunal. The reassessment is traceable to section 16(1) which provides for assessment of escaped turnover. The penalty in relation thereto is leviable under section 16(2) of the Tamil Nadu General Sales Tax Act. The correct provision applicable is section 16(2) of the Tamil Nadu General Sales Tax Act. However, the crucial ingredients of that provision are not satisfied in the instant case because it is not a case of non-disclosure of turnover. The levy and quantification of penalty under section 16(2) is directly related to the factum of wilful non-disclosure of turnover. It is beyond dispute that the entire turnover was disclosed by the appellant in the return read with the accompanying documents. There was no addition to the total turnover. However, the appellant put forward a wrong claim in respect of a part of the turnover on the ground that it represented stock transfers. No doubt, the claim was not accepted. That does not mean that the appellant was guilty of non-disclosure of any turnover. Hence, the penalty provision und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
