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TMI Blog2022 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... d by an identifiable or visible contract of sale or purchase of goods. If yes, the deeming fiction would attach with full force. If however, that contract of sale or purchase is not visible, suspicions howsoever strong may not lead to levy of central sales tax. Though, under the Franchise Agreement quantities of camphor and camphor products were to be supplied by the assessee to the Franchise at Delhi yet, there was no firm order in existence as may have been placed on the assessee on the date of transfer of camphor and camphor products made by it from its factory at Bareilly to Delhi. Besides strong suspicion expressed by the revenue authorities, no credible material or evidence could be gathered by them to establish existence of a single contract of sale that may have occasioned the movement of goods from Bareilly to Delhi. In fact, undisputed statement of account as has been noted, reveals only part quantity of camphor and camphor products transferred by the assessee to its branch at Delhi were sold to the franchise at Delhi. The remaining quantities were sold to other persons. The fact that the assessee's branch was found situated within the factory premises of the Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.03.2011 in Second Appeal No. 94 of 2009 for A.Y. 2004-05 (Central). By that order, the Tribunal has dismissed the appeal filed by the assessee. It has thus confirmed the order passed by the first appeal authority confirming the rejection of claim of stock transfer raised by the assessee - from its factory premises at Bareilly to its branch at Delhi. 3. The revision has been pressed on the following question of law: Whether in face of findings recorded by the Tribunal, inference of inter-State sale from Bareilly to Delhi could have been raised though there was no clear evidence of prior contract of sale having occasioned the movement of goods from Bareilly to Delhi ? 4. On 01.04.2003, the assessee had entered into a Franchise Agreement with one M/S Dinesh Kumar Brothers, a proprietorship firm having its processing unit/factory at 398 Functional Industrial Estate, Patparganj, Delhi (hereinafter referred to as the 'Franchise'). Under the said agreement, the assessee was to supply camphor products to the Franchise for processing. Also, under that agreement, the Franchise was enabled to procure and sell certain camphor tablets. Clause 6(a) of the agreement rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement executed between the parties, wherein the assessee was obligated to make supplies of camphor and camphor products both for the purposes of processing and trading. Again, it is not in dispute, the Franchise had its place of business in Delhi. The movement of goods from factory premises of the assessee located in the State of U.P. to the Delhi is also not disputed. 8. However, the above undisputed facts do not lead to the conclusion of performance of inter-State sale. The Central sales is not a different type of sale. In fact, it is a fiction of law created under Section 3 of the Central Sales Tax Act, 1956 (hereinafter referred to as the 'Act'). For ready reference, the main provision of Section 3 of the Act reads as below: 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. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement quantities of camphor and camphor products were to be supplied by the assessee to the Franchise at Delhi yet, there was no firm order in existence as may have been placed on the assessee on the date of transfer of camphor and camphor products made by it from its factory at Bareilly to Delhi. Besides strong suspicion expressed by the revenue authorities, no credible material or evidence could be gathered by them to establish existence of a single contract of sale that may have occasioned the movement of goods from Bareilly to Delhi. In fact, undisputed statement of account as has been noted, reveals only part quantity of camphor and camphor products transferred by the assessee to its branch at Delhi were sold to the franchise at Delhi. The remaining quantities were sold to other persons. To that extent, the case of the present assessee stands on a better footing than Kelvinator (supra) . There entire quantities of refrigerators had been sold to the pre-defined distributors. 12. The fact that the assessee's branch was found situated within the factory premises of the Franchise would also not create a presumption of existence of prior contract of sale. Letting of prem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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