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TMI Blog2009 (6) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in Andhra Pradesh, the appellant sold them in other States also, either directly or through consignment agents. The appellant paid Central sales tax in Andhra Pradesh on direct inter-State sales and claimed exclusion of sales made through consignment agents located in other States from the taxable turnover under the CST Act. Some of those claims have been rejected on various grounds, like the sales in question are not covered by F forms and other relevant documents, some of the consignment agents are non-existent, some have no valid registration and are using registration numbers of others, some of the consignment agents have denied the transaction altogether or having issued F forms, some have denied having acted as consignment agents, some have claimed that they are in fact purchasers and some of the F forms filed were not issued by the concerned State authorities at all. The appellant's claims have been rejected based on the material collected in the course of investigation. The Officers of the Enforcement Wing were deputed to places outside Andhra Pradesh to enquire into the genuineness of the consignment transactions. The Commercial Tax Officer (Int.), Enforcement Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Rs. 3,82,44,636 has been remanded for non-furnishing of investigation reports to the appellant. A penalty of Rs. 1,40,83,704 which is three times the tax of Rs. 46,94,568 has also been confirmed. The present appeals are directed against the disallowance of claim of the stock transfer of Rs. 4,69,45,683 made under section 6A and imposition of penalty of Rs. 46,94,568. The appellant prays that the said orders may be set aside to the extent they confirm the levy of Central sales tax amounting to Rs. 46,94,568 and imposition of penalty of Rs. 1,40,83,704. Section 6 of the Act, which is the charging section, provides for imposition of tax on all sales made in the course of inter-State trade or commerce during any year. In case a dealer claims that the inter-State movement did not take place on account of sale, but by reason of transfer of goods to another place of his business or to his agent or principal, section 6A provides for the manner in which the dealer shall make his claim and the order of the assessing authority thereon. This section is extracted below: 6A. Burden of proof, etc., in case of transfer of goods claimed otherwise than by way of sale. (1) Where any dealer c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect, before accepting the claim of the dealer and making necessary order. As seen above, during the period under consideration in this case, filing of F form was not compulsory. Reference may also be made here to section 3(a) of the Act according to which a sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase occasions the movement of goods from one State to another. The Supreme Court has held in Tata Iron and Steel Co. Limited v. S.R. Sarkar [1960] 11 STC 655 and Tata Engineering and Locomotive Co. Ltd. v. Assistant Commissioner of Commercial Taxes [1970] 26 STC 354 that an inter-State movement of goods becomes taxable under section 3(a) only if such movement takes place under a covenant of contract of sale or is an incident thereof. As already stated, the disputed turnover in the present appeals is Rs. 4,69,45,683. The Tribunal has discussed the concerned transactions item-wise. There are in all 50 transactions. The items disallowed by the Tribunal are at serial Nos. 1, 4, 5, 6, 7, 9, 11, 12, 13, 14, 16, 17 to 30, 32, 33 to 36, 38, 39, 41, 42, 43, 47 to 62. We proceed to examine them one by one with a v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther any statement of the agent has been recorded and whether the books of account of the said agents and other documents were verified. The report on which the Tribunal relied is very general in nature and lacking in particulars. We, therefore, hold that the disallowance of the appellant's claim in respect of these transactions cannot be upheld. The appeal is, therefore, allowed on those items. S. No. 9: Jai Baba Oil Mills, Gondiya This involves a turnover of Rs. 8,16,010. The assessing authority has stated that the consignment agent does not exist on the records of the Commercial Taxes Officer, Gondiya. It appears that some documents, such as pro forma invoice and way-bill and a letter of the agent were filed by the appellant before the Tribunal. The Tribunal has confirmed the assessing officer's order on the grounds that the agent has denied the consignment transaction and that the evidence produced by the appellant is incomplete. We find an apparent contradiction in the Tribunal's order. Whereas the assessing officer rejected the claim of the appellant on the ground of nonexistence of the consignment agent, the Tribunal has confirmed that order on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this case is Rs. 4,40,736. The assessing authority states that the dealer did not receive goods on consignment from the appellant. The Tribunal notes that the appellant has filed pro forma invoice, F form (written as F 117 dated April 2, 2000) and sale patties issued by the dealer, dispatch statement and ledger copy. Without discussing the merits of those documents, the Tribunal simply describes them as incomplete information and dismisses the claim of the appellant on the sole ground that the dealer is stated to have denied the transaction. The respondents have filed a copy of written statement dated December 6, 2003 of the proprietor of the firm, in which he states that he did not act as consignment agent of the appellant during the year 2001-02 and did not issue any F forms or sale patties during the period. We notice that this denial is in respect of the year 2001-02 whereas the present case relates to the year 2000-01. Thus this statement is not relevant for the present case. The sale patties stated to have been issued by the dealer (consignment agent) should have been verified with reference to the books of account of that dealer. We, therefore, set aside the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gent is not registered in Nanded and that the registration number attributed to this agent belongs to M/s. Suresh Co. Though the appellant has filed sale patties and bank statement, in view of the clear report of the Sales Tax Officer, Nanded and the failure of the appellant to furnish the registration particulars of the dealer, we refrain from interfering with the order of the Tribunal. S. No. 18: M/s. Maruthi Comml. Corporation, Pune The turnover involved is Rs. 4,93,164. The assessing officer and the Tribunal state that the appellant filed pro forma invoice and way-bill, but the agent has denied the transaction. But the report dated September 26, 2003 by AC (Sales Tax), Pune does not state that the dealer denied the transactions with the appellant. He gave the details of purchases and sales returned and stated that party-wise details are not available and summary assessment was made. He also reported that registration certificate was cancelled the next year. The appeal on this item should therefore be allowed. S. No. 19: M/s. Datt Soap Factory, Aurangabad The turnover involved is Rs. 11,08,052. This is also stated to be a case of denial of transaction by the agent. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd pro forma invoices, the CST registration number indicated thereon belongs to M/s. Thapadia Plywood Centre. This fact has been communicated by the Sales Tax Officer, Parbhani vide his letter dated December 23, 2003. We have also perused a copy of the said letter. The appellant has not produced any material except bank statements to rebut the above fact. The bank statements by themselves do not establish the identity of dealer (agent). In view of the Sales Tax Officer's report, the documents filed by the appellant cannot be taken as genuine. We will, therefore, not interfere with the Tribunal's order. S. No. 24: M/s. Vishnu Trading Company, Akola A turnover of Rs. 2,31,600 is involved in this case. The basis of rejection of the claim is a letter dated December 5, 2003 of the Sales Tax Officer, Akola intimating that the relevant registration number belongs to M/s. K.B. Vora Associates and M/s. Vishnu Trading Company is not registered in Akola. The appellant has not filed any material to disprove the above fact. So, we uphold the order of the Tribunal. S. No. 25: M/s. Shiriji Trading Company, Nanded The turnover involved is Rs. 18,53,279. The claim has been rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order and as available on record. The statement dated November 14, 2003 refers to S. Nos. 4567 and 4570 instead of S. Nos. 4589 and 4580 as quoted in the appellate order. This statement does not refer to the consignment weighing 9440 kg., and valued at Rs. 3,01,046. Also, there is no statement indicating that the agent did not receive any consignment during 2000-01 from the appellant. We are of the view that rejecting the appellant's claim on the basis of the above statement, disregarding all the documents produced by the appellant would not advance the course of justice. No verification of the dealer's account books was done by any officer to test the the veracity of the partner's statement. Hence, the appeal is allowed on this item. S. No. 29: M/s. Rajeswari Oil Mills, Tumkur This transaction relates to a turnover of Rs. 7,68,511. The claim of the appellant has been rejected on the basis of a written statement of a partner of the agent, which denies having received goods from the appellant on consignment basis or having issued sale patties and F forms to them. The appellant has filed copies of some sale patties and broker's communications showing consign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is a fit case for allowing the appeal. S. No. 33: M/s. Anil Sanjay Company, Nagpur This transaction involves a turnover of Rs. 7,61,250. The claim has been rejected on the basis of a statement made by the agent on December 6, 2003 before the investigating authority, Nagpur that it closed its business with effect from December 31, 1999 and never acted as consignment agent or issued sale patti or F form to the appellant. Even though the appellant produced pro forma invoice, way-bill, consignment agent's letter dated January 25, 2001 and payment receipts, the Tribunal rejected the claim in view of the investigation report. Incomplete copy of statement of the agent has been filed before us by the respondent. We are of the view that the Tribunal should have considered the evidence produced by the appellant also along with the statement of the consignment agent before coming to a definite conclusion. The alleged statement has not been verified with reference to the records of the Nagpur sales tax authorities and the books of account of the agent. In view of these omissions on the part of the assessing authority, the appeal on this item is allowed. S. No. 34: M/s. Asha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing officer and the Tribunal on the basis of a letter dated October 24, 2001 of the Deputy Director of Computer Section (Sales Tax Department, Mumbai). However, the report filed by the Department before this Authority shows that the said dealer is a registered dealer both under the BST and CST Acts within the jurisdiction of the STO, Palghar. Thus, there are discrepant reports. It is quite likely that the computer information is deficient. The appellant has filed before us the extract of the bank statement. In view of the contradictory reports, the appeal is allowed. The Tribunal has not expressed any view in respect of this item. S. No. 41: M/s. Kartik Traders, Mangalore The turnover involved is Rs. 37,40,864. The claim has been rejected on the basis of two communications of the commercial taxes authorities of Mangalore dated October 19, 2001 and March 11, 2003 to the effect that the registration certificate of the agent was cancelled with effect from February 24, 2000. In the light of these communications, form F filed by the appellant has not been relied upon. The respondent has filed an incomplete copy of the letter dated November 3, 2001 of the Karnataka autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 14,17,247. The claim has been rejected on the basis of the statement dated December 4, 2003 of the consignment agent denying the transaction. The pro forma invoice, commission patti and customer ledger were produced by the appellant. The Tribunal has not drawn any conclusion of its own. There is nothing to show that the agent's books of account have been verified to test the correctness of his statement. Hence, the appeal on this item is allowed. S. No. 49 M/s. Jabbar Trading Company, Akola The turnover involved is Rs. 1,94,138. The claim has been rejected by the assessing officer on the basis of a statement dated December 4, 2003 made by the agent denying the transaction, even though the appellant had filed pro forma invoice and customer ledger. The Tribunal has not expressed any opinion. The respondents have filed a copy of the said statement before us. We notice that the statement has been made by one Nadeem K. Munshi, in his capacity as manager of the company. So far as the appellant is concerned, the consignment sale during 2001-02 has been denied and the issuance of sale patti and F form has also been denied. No verification of accounts of the dealer has been ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal is allowed. S. No. 54: M/s. Ghanshyam Trading Company, Hingoli The turnover involved in the case is Rs. 5,70,378. The Tribunal notes that as per the report of the Sales Tax Officer, Parbhani, the agent is not registered and the registration code does not pertain to Hingoli. The appellant has not produced any evidence regarding the registration particulars of the said dealer or his existence. Hence, the appeal is rejected. S. No. 55: M/s. Nilesh Kumar Company, Nagpur The turnover involved is Rs. 2,41,430. The claim has been rejected on the ground that the agent does not exist. There is no reference to the basis on which this finding has been arrived at. It is noted by the Tribunal that the appellant has filed pro forma invoice, dispatch register, ledger copy and sale patti. These documents do not appear to have been examined. The respondent has filed before us a copy of the report of the Sales Tax Officer (Returns and Registration Branch), Nagpur stating that the registration certificate of the agent was cancelled with effect from March 31, 2001; the agent was assessed and paid taxes till cancellation of the registration certificate. The appellant has filed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies stating that Sai Refineries is not registered in Nanded and that the registration number attributed to it belongs to M/s. J.B. Co., Nanded. Hence, it is not a case for interference with the order of the Tribunal. S. No. 60: M/s. G.S.P. Trading Company, Parbhani The turnover involved in this case is Rs. 3,84,860. As per the report of the Parbhani sales tax authorities this agent is not registered in Parbhani and the registration certificate attributed to it belongs to M/s. Raj Trading Co. Hence, this is also not a fit case for interfering with the order of the Tribunal. S. No. 61: M/s. Ram Prasad Agencies, Raichur The turnover involved is Rs. 40,000. The claim has been rejected on the ground that the agent has denied having received the goods. The appellant produced sale patti and F form, which do not appear to have been examined. The respondent has not filed the statement of agent before us. The agent's accounts were apparently not examined at any stage. Hence, the appeal on this item is allowed. S. No. 62: M/s. Lakshminarayana Oil Mills, Satara This transaction is for a turnover of Rs. 2,48,253. The claim has been rejected on the basis of denial of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Authority held that penalty at three times the tax due can be levied in a case falling under section 7A of the APGST Act. Hence, we do not find any infirmity with the penalty order. Penalty has been imposed on the rejected turnover after the documents relied on by the appellant were found to be nongenuine or bogus. We may mention that separate arguments have not been addressed in regard to levy of penalty. However, in the present appeals we have set aside the impugned orders in respect of certain transactions. The appeal on a turnover of Rs. 217.60 lakhs has been rejected. Penalty can therefore be levied only on the items in respect of which the appeal has been rejected by this Authority, i.e., on the above turnover. Appeal Nos. 313 and 314 of 2006 are thus partly allowed. Appeal No. 315 of 2006: This is an appeal by the Department against the order in penalty appeal (T.A. No. 965 of 2004). From the grounds of appeal, it is seen that the Department is aggrieved against the order of the Tribunal in so far as the Tribunal set aside the penalty in respect of items remanded for fresh assessment. The contention of the State is that instead of setting aside the penalty, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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