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TMI Blog2015 (1) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... % and the total value of CST mentioned in the invoice at Rs. 7,65,383.07. Instead of CST, this should have been VAT under the Jharkhand Value Added Tax Act, 2005, because the petitioner is e-auction purchaser of coal within the State of Jharkhand. He is a registered dealer within the State of Jharkhand. The seller and purchaser of the goods are within the State of Jharkhand. The whole transaction of sale has been completed within the State of Jharkhand and, therefore, the Annexure 4 as CST Invoice cannot be issued. In fact, it should have been VAT and respondent No.6 is at no loss at all , because the VAT is also at the rate of 5% and the CST is at the rate of 5%, but it would make a difference for this petitioner for getting input tax credit under Section 18 of the Jharkhand Value Added Tax Act, 2005 to be read with Rule 26 of the Value Added Tax Rules, 2006. Similarly, it also makes a difference to the subsequent purchaser of coal, who is at Uttrakhand, because the petitioner is a registered dealer and, therefore, at Uttarakhand, the purchaser of the coal from this petitioner is in a second sale which is also altogether a different transaction, he will have to pay CST at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat they have filed a detailed counter affidavit and as the movement of goods from one State to another State, they have mentioned CST at the rate of 5% in their Tax Cum Excise Invoice which is at Annexure 4 to the Memo of Petition. Counsel for the respondent has also taken this Court about the various movement of goods. 3) Having heard both sides and looking the facts and circumstances of the case, it appears that respondent No.6 has committed gross error in mentioning CST at the rate of 5% in Column 12 of Tax Cum Excise Invoice at Annexure 4, mainly for the following facts and reasons: - (i) Petitioner is a registered dealer within the State of Jharkhand. During the e-auction of coal proposed by respondent No.6-Coal Company, this petitioner, who is situated within the State of Jharkhand, had participated in the e-auction of coal. (ii) Petitioner being the highest bidder was a purchaser of coal from respondent No.6 which is also situated within the State of Jharkhand. Now, consideration has also been moved from petitioner to respondent No.6 and the sale was completed between the petitioner and the respondent No.6 within the State of Jharkhand. (iii) Looking to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. the first sale which is inter-state sale, whereas transaction between B and C i.e. from the petitioner and Uttarakhand Sale, which is the second sale. For the ready reference, Section 3 of the Central Sales Tax Act, 1956 reads as under: - "3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce. - 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- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." (Emphasis supplied) (x) In view of the Section of the Central Sales Tax Act, 1956, the presumption of inter-State will come into existence only upon fulfilling the following two conditions: - (a) There must be one transaction of sale or purchase of goods. (b) In this one transaction of sale or purchase of goods, movement should be from one State to another State. In the facts of this case, in first sale between petitioner and respondent no.6, goods have never moved out of State. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer or to a casual trader or agent is liable to be taxed as there is no dispute of sale within the State of Tamil Nadu. The petitioners in all cases have bound themselves by the terms and conditions contained in the tender-cum-auction sale notification and the provisions of the TNVAT Act, 2006, for payment of tax on sale of goods within the State of Tamil Nadu. Therefore, they cannot resile from their contract nor does the law provide for payment of lesser tax, as the sale in the present case attracts the provisions of the TNVAT Act, 2006 as set out above. Merely because there is movement of goods from the State of Tamil Nadu to another State at the instance of the buyer, that would not take it out of the purview of the term sale within the State. There are certain rules which provide for transportation of goods in question after the sale. But that does not change the character of the sale within the State consequent to tender-cum-auction sale. The benefit which the petitioners may get out of the provisions of the Income-tax Act is totally alien to the payment of tax under the TNVAT Act, 2006, as the two enactments operated in different fields. There is no scope or provision f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, there is no conceivable legal link between the auction sale in Tamil Nadu and the movement of goods to Karnataka. The said movement was purely voluntary at the option of the petitioner and not under any legal obligation. Hence, the decision in South India Viscose Ltd. v. State of Tamil Nadu [1981] 48 STC 232 (SC); AIR 1981 SC 1604 is clearly distinguishable." The decision of the Division Bench, cited supra, fortifies the view now taken by this court. For the reasons stated supra and in view of the decision of the Division Bench of this court, the plea of the petitioners that it is an inter-State sale has no legal basis and hence,the said contention is rejected. The challenge to levy of Tamil Nadu value added tax therefore fails." (Emphasis supplied) (xv) In view of the aforesaid decision, even if the movement of goods have taken place out of one State to another State, by per se, CST is not leviable. One has to draw his attention, whether the movement of goods from one State to another has taken place due to e-auction or not. If answer is negative, the CST is not leviable. There may be second sale. Subsequent purchaser may purchase the same goods. Now, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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