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TMI Blog2020 (5) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate central sales tax before the goods left the Maharastra border under the provisions of the Central Sales Tax Act, 1956 - As such, no taxable event had taken place within the State of Tamil Nadu. There was also no scope for invoking Section 72 of the TNVAT Act, 2006 under the circumstances - the argument of the learned counsel for the petitioner that there was an E-1 transaction cannot be countenanced in the facts of the present case. Only such transaction would be exempted under section 6 (2) of the Central Sales Tax Act, 1956. This is on the underlying principle under the Central Sales Tax Act, 1956 that subsequent sale of goods in the course of interstate trade and commerce are not taxed twice. Petition allowed - decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent near Kuppam, Krishnagiri District vide two different detention notices as one of the lorry had two consignments for being delivered in Coimbatore.. 5.Pursuant to the aforesaid detention of the three consignment of goods, the petitioner sent a representation dated 14.8.2013 and requested for immediate release of the detained lorry and the consignment of goods on the ground that the transaction was covered by E1 sales invoice and therefore the transaction outside the purview of the respondents under Tamil Nadu Value Added Act, 2006. The detention notice however reportedly stated that the transactions in the invoice were doubtful and would require further investigation. 6.Thereafter, the impugned orders titled as Draft Compounding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% on the transaction. 12.It is only thereafter, the impugned draft compounding notices dated 15.8.2013 were issued to the petitioner. It is submitted that petitioner has an alternate remedy under section 54 of the Tamil Nadu Value Added Tax Act, 2006. It is further submitted that as per rule 15 (1) Of the Tamil Nadu Value Added Rules, 2007, the Deputy Commercial Tax Officer/Check Post Offices are competent to conclude whether the petitioner had evaded payment of tax in their earlier transactions also and therefore in lieu of prosecution, the petitioner was given an opportunity to compound the offence on payment of the amount prescribed under section 72 (1) of the Tamil Nadu Value Added Tax Act, 2006 by way of the impugned notices. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u. The 1st respondent thus had no authority to tax the above transaction. For the same reason, there was also no scope for invoking Section 72 of the TNVAT Act, 2006 under the circumstances. 16.At the same time, the argument of the learned counsel for the petitioner that there was an E1 Transaction appears to be misplaced in as much E1 Transaction takes place only after the goods have been put to the possession of the transporter for being supplied to the buyer outside the State and the said buyer effects a subsequent sale while the goods are in the possession of the transporter or in transit. 17.Central Sales Tax Act 1956 envisages a single point of taxation i.e. tax at the first point of sale. Subsequent sales during the movement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods commences with the delivery of goods to carrier or other bailee or transmission and terminates when delivery is taken from the carrier. 21.As per Explanation 2 to section 3 of the Central Sales Tax Act 1956,it shall not be deemed to be a movement of goods from one state to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other state where the movement of goods commences and terminates in the same state. 22.Section 6(2) of CST provides exempts from payment CST on subsequent sales, which has been effected by transfer of documents of title of goods during their movement in the cost of interstate sales. 23.In A amp; G Projects and Technologies Ltd v. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduced in Section 6 in order to avoid cascading effect of multiple taxation. A subsequent sale falling under sub-section (2), which satisfies the conditions mentioned in the proviso thereto, is exempt from tax as the first sale has been subjected to tax under sub-section (1) of Section 6 of the CST Act, 1956. Thus, in order to attract Section 6(2), it is essential that the sale concerned must be a subsequent inter-State sale effected by transfer of documents of title to the goods during the movement of the goods from one State to another and it must be preceded by a prior inter-State sale. It is only then that Section 6(2) may be attracted in order to make such subsequent sale exempt from levy of sales tax. However, the proviso to sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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