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TMI Blog2019 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ances were not produced by the appellant before the audit team at the time of tax audit. They were not produced at the time of regular assessment for verification. This is, therefore, a case of suppression of material facts. There is undoubtedly misrepresentation of relevant facts. Reopening of the assessment therefore cannot be faulted. Moreover, Rule 12(4) of the Rules also permits the Assessing Authority to reopen the assessment in such circumstances. It is not possible in this case to say that the Assessing Authority i.e. the DCST has not conducted any enquiry. Undoubtedly, the Assessing Authority has to conduct an enquiry - It must be remembered, however, that no particular form of enquiry is prescribed. What should be the nature of enquiry is for the Assessing Authority to decide. After enquiry, he may pass an order on such declaration before the assessment or along with the assessment. Thus it can be concluded that, the Assessing Authority has conducted an enquiry and recorded in the reassessment order that Form-F declarations deserve to be rejected. The Assessing Authority has followed the mandate of law. Admittedly, during the hearing of Appeal No. FA 2 (C) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The said appeal was filed by the appellant against the re-assessment order dated 24.01.2011 passed by the Deputy Commissioner of Sales Tax (LTU), Sambalpur Range ( DCST or the Assessing Authority for convenience) under Rule 12(4) of the Central Sales Tax (Orissa) Rules, 1957 ( the Rules for short). By the reassessment order dated 24.01.2011, the DCST has disallowed the branch transfer claim of the appellant and reassessed the tax liability of the appellant for the tax period 01.04.2007 to 30.09.2007 raising a demand of ₹ 15,04,953.00. Brief facts of the case need to be stated. The appellant company is engaged in the manufacture and sale of M.S. Billets and Sponge Iron at their factory located At/ Po-Gurupali, Lapang, Rengali, Dist- Sambalpur Odisha. The appellant sales its finished goods in the course of intra State trade and also in the course of inter-State trade. The original audit assessment of the appellant for the year 01.07.2006 to 30.09.2007 was completed under Section 12(3) of the Rules raising Nil demand but the case was reopened under Rule 12(4) of the Rules for the period 01.04.2007 to 30.09.2007 relying on a Tax Evasion Case Report ( the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any buyer. Counsel submitted that it is a settled position of law that sale of goods by the agent within few days of receipt, no unloading and reloading of the lorries by the agent at its place and receipt of the same price as mentioned in the invoices are irrelevant factors for inferring that there was pre-existing contract. In this connection he relied on the decisions in (a) Delhi Iron Steel Co. Ltd. Vs. Commissioner of Sales Tax, UP (1989) 72 STC 294 ; (b) State of Tamil Nadu vs. PMP Iron Steel India Ltd. (2010) 28 VST 370 (Mad); (c) CTT vs. Dharshan Olls Pvt. Ltd 2006 NTN (Vol.31)-154; (d) Associated Cement Companies Ltd. Vs. AC(CT) [2009] 23 VST 486 (Mad); and (e) State of Tamil Nadu vs. Kumaran Mills Ltd. (2010) 3 GST 408 (Mad). Counsel submitted that the Sale Order Acceptance which is made the basis for drawing adverse inference does not relate to the period under dispute and hence cannot be used for initiation of instant proceedings. In this connection, Counsel relied on Asna Cosmochems vs. State of Tamil Nadu (2010) 2 GST 165 (CSTAA- New Delhi). Counsel further submitted that the intention of the appellant would be clear from the fact that the VAT @ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave paid less amount than the amount already paid by it. Finally, Counsel drew our attention to the Tribunal s order dated 15.03.2017 in appellant s Appeal No. F. A. No. 6 (c) of 2011-12 for the subsequent period 01.10.2007 to 30.09.2009 by which the Tribunal has set aside the order of the DCST rejecting the stock transfer claim of the appellant and raising a demand of ₹ 43,28,475.00 which included penalty of ₹ 28,85,650/-. Counsel submitted that since in similar fact situation the Tribunal has upheld the stock transfer claim of the appellant, the impugned order deserves to be set aside. On the other hand, Mr. Soumyajit Pani, ld. Counsel for the State of Odisha supported the impugned order. Counsel submitted that the reassessment order 24.01.2011 is a well reasoned order. The DCST has considered all the aspects and rejected the stock transfer claim of the appellant. The Tribunal has rightly confirmed the said order. Counsel submitted that the order of the Tribunal passed in respect of subsequent period should not deter this Authority from confirming the impugned order because both the orders cover different periods. Counsel submitted that principles of res judicata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant s goods were sent to the consignment agent, M/s Gauri Sales and not directly to the buyer/ purchaser. M/s Gauri Sales sold the said goods to the purchasers. Counsel submitted that M/s Gauri Sales obtained necessary F forms from the Sales Tax Department. Turnover of branch transfer was duly disclosed in the returns and taxes were paid accordingly. Counsel heavily relied on the Tribunal s order dated 15.03.2017 for subsequent assessment period i.e. 01.10.2007 to 30.09.2009 in appellant s appeal being First Appeal No. 6 (C) of 2011-12 where the Tribunal upheld stock transfer claim of the appellant in similar fact situation. Counsel submitted that the appellant has sought refund of ₹ 5,01,651/- paid as VAT on the goods sold by M/s Gauri sales. However, there is no prayer made to that effect. Counsel submitted that since appellant s stock transfer claim is genuine, refund sought by the appellant is not justifiable and tenable. TECR is of seminal importance to this case. Material contents of TECR have been explained in brief in the reassessment order. It is necessary to reproduce its gist. The gist is as follows. On 04.05.2010, the Vigilance Team, Sambalpur vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 194.93 during July 2007 Not available M/s Sanvijay Rolling Engg. Ltd. Ind. Area, Hingra Road, Nagpur SM07Y00032 dt. 7.8.2007 200 MT 193.89 during Aug. 2007 and 3.9.2007 19300+ED M/s Khatushyamji Re-Rolling MIDC SM07Y00038 dt. 15.9.2007 150 MT 144.44 during Sept., 2007 19800+ED -do- The above table indicates that the dispatched quantity of goods against a particular Sale Order is meant for a specific buyer at a pre-negotiated price. Similarly, specific quantity of goods at a specific rate is delivered to a specific buyer at a negotiated price. There is a visible contract of sale being governed by a definite sale order meant for a specific ultimate buyer. Hence the movement of goods from the factory till the delivery to the ultimate buyer forms an integrated process of an inter-State sale without there being a break in the inter-State movement of the goods. The buyer remains identified before commencement of the inter-State movement of goods. Thus these transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-line connection on the basis of which we arrange for dispatch of the specified goods in specific quantity. As regards to sale of M.S. Billets Sri Agrawal has categorically stated that M.S. Billets are loaded on the vehicles by crane at our factory and directly unloaded at the factory of the ultimate buyers with the help of crane. In other words, M.S. Billets directly moved from factory without being unloaded or stored by our agent On the other hand, Mr. Pati tried to salvage the situation created by Mr. Agrawal s statement by saying that the Sale Order Acceptance forms are internal records for the smooth functioning of the appellant. He further stated as follows: Except the description of items, quantity and rate other data fed to the forms are irrelevant relating to the consignment sales. As because there is a common package for sale, some datas have to be fed, therefore our concerned person has fed irrelevant datas to generate the forms . He went on to state that he was unaware of despatch of goods in the same lot, same quantity and in the same vehicle by the appellant s agent as despatched from the appellant s factory. Mr. Pati s statement does not inspire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended by the Counsel for the appellant that assessment could not have been reopened after finalization of audit assessment. Counsel submitted that in Ashok Leyland-II, the Supreme Court has laid down that reopening of assessment is permissible only on limited grounds i.e. fraud, collusion, misrepresentation or suppression of relevant facts which is not the case here. It is not possible to accept this submission. From the TECR received from the Vigilance Wing Sambalpur it becomes apparent that the appellant had suppressed material facts and projected inter-State sales as stock transfers to evade tax. The Assessing Authority has, after verification of documents, independently drawn the conclusion that the appellant has suppressed material facts and the Tribunal has concurred with the same. I have no reason to defer from the view taken by the Assessing Authority and the Tribunal because it is based on proper analysis of the documents and other evidence. Pertinently the most vital documents i.e. the Sale Order Acceptances were not produced by the appellant before the audit team at the time of tax audit. They were not produced at the time of regular assessment for verification. This i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration an enquiry is required to be held by the Assessing Authority himself. He must pass an order on such declaration in terms of sub-section(2) of Section 6A of the CST Act and once that order is passed then the transaction goes out of the purview of the CST Act. Counsel submitted that in this case the Assessing Authority has not conducted any enquiry himself nor has he passed any order, hence the presumption is unrebutted. These submissions deserve to be rejected. The DCST had before him the TECR submitted by the Vigilance Wing Sambalpur. It appears from the TECR that after examining the documents gathered from the appellant s premises, the officers of Vigilance Wing detected the modus operandi adopted by the appellant. The said modus operandi is stated in the TECR and it is recorded that the appellant s transactions during the relevant period are inter-State sales though projected as stock transfers. It bears repetition to state that the DCST has not totally relied on the TECR. The DCST has examined all documents independently. He has verified them and observed that the appellant has misrepresented the facts and that there is suppression of vital facts. The DCST ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned as a result of sale. Such declaration, indisputably, is to be filed in Form F. The said form is to be filled in triplicate. The prescribed authority of the transferee State supplies the said form. The original of the said form is to be filed with the transferor State and the duplicate thereof is to be filed before the authorities of the transferee State whereas the counterfoil is to be preserved by the reason where the agent or principal of the place of business of the company is situated. 45. When the dealer furnishes the original of Form F to its assessing authority, an enquiry is required to be held. Such enquiry is held by the assessing authority himself. He may pass an order on such declaration before the assessment or along with the assessment. Once an order in terms of sub-section (2) of Section 6- A of the Central Act is passed, the transactions involved therein would go out of the purview of the Central Act. In other words, in relation to such transactions, a finding is arrived at that they are not subjected to the provisions of the Central sales tax. It is not in dispute that thereunder no appeal is provided thereagainst. The Supreme Court has also quoted wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a proper and just finding as required by Section 6-A(2) of the Act. If the facts of the present case are examined in the light of the above observations of the Supreme Court, it can be concluded that the Assessing Authority has conducted an enquiry and recorded in the reassessment order that Form-F declarations deserve to be rejected. The Assessing Authority has followed the mandate of law. Counsel for the appellant heavily relied on the order dated 15.03.2017 passed by the Tribunal in the appellant s own appeal being Appeal No. FA No. 6 (C) of 2011-12 for the subsequent period 01.10.2007 to 30.09.2009. Counsel pointed out that in this appeal the Tribunal has set aside similar order passed by the DCST in similar fact situation and upheld the appellant s claim of stock transfer. Counsel submitted that therefore the impugned order deserves to be set aside on the reasoning of the Tribunal recorded in order dated 15.03.2017. This submission will also have to be rejected. Admittedly, during the hearing of Appeal No. FA 2 (C) of 2011-12, the appellant did not draw the Tribunal s attention to the impugned order. Had the impugned order been shown to the Tribunal, the Tribunal mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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