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TMI Blog2023 (10) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... to consideration the entry at page No. 35 of the diary as transaction of sale in the absence of better evidence. There is no gainsaying in pointing out that as per Section 6 of DST Act, the burden of proving that sale was not effected and that no tax was liable to be paid, was upon the appellant. The assessing authority took a fair, just and reasonable view of the matter in proceeding to carry out a best judgment assessment thereby enhancing sales by 10% of the net GTO after deducting the stock transfer figure of GTO, and accordingly, the levy of tax with interest cannot be said to be unpalatable or an unconscionable exercise of powers. On a conjoint reading of the provisions of Section 2(g) of CGST Act, it is clearly brought out that sale is transfer of property in goods from one person to another for cash or deferred payment or for any other valuable consideration. In other words, sale is transfer of ownership in the goods as per any contract between seller and the buyer, and it is pursuant to a contract of sale that when goods move from one State to another that Section 3 of the CST Act comes into play - no presumption in law is invited merely because the goods moved from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining to the period 1996-97 and certain documents including diaries of sales persons and certain gate passes were seized. The Sales Tax Officer, Enforcement eventually passed an assessment order dated 31 December 1999 under Section 23(3) of the DST Act directing the appellant to pay a sum of Rs. 59,49,503/-, comprising of tax component to the tune of Rs. 32,34,254/- plus interest amounting to Rs. 17,26,249/- and penalty for a sum of Rs. 10,00,000/- for the period 1996-97, primarily based on variations in physical stock in comparison to the stock in record. The demand of DST was computed by increasing the sales value of the goods. 4. The second limb of the grievance of the appellant emanates from the purported gate passes inviting an inference by the Revenue that the goods were transferred from the Delhi branch to the Faridabad and Ghaziabad branches on receiving orders from certain dealers and accordingly, an assessment order was issued under Section 9 of the Central Sales Tax Act, 1975 [CST Act] directing the appellant to pay Rs. 58,43,131/- (Tax component of Rs. 38,43,131/- and penalty of Rs. 20,00,000) for the period 1996-1997 and the demand of Central Sales Tax was comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods had been sent to Ghaziabad and Faridabad branches outside Delhi pursuant to the orders received from the customers viz., FEDCO, BGM and NTPC and the plea of the appellant that the gate passes were meant for internal records of the company to maintain track of the stocks was rejected. Thus, the transactions were held to be a case of inter-State sale covered by Section 3(a) of the CST Act. 8. In arriving at such decision, learned DVATT observed that the appellant had failed to produce any gate pass books on the pretext that old records were not available and thus, found justification in the decision of the Assessing Authority that the gate passes, which pertained to September 1996, were sufficient to raise an inference of sales from April 1996 to August 1996. Learned DVATT also agreed with the Revenue about its case of finding discrepancies in the stock registers and that the assessee had neither explained the variations nor the sales had been accounted for. It was observed that in the given set of facts and circumstances where the dealer had withheld relevant documents or records, the Assessing Authority was left with no option but to carry out best judgment assessment a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appellant had duly rebutted the documents put to him during the assessment proceedings on 18 November 1999, 25 November 1999, 29 November 1999, 02 December 1999, 08 December 1999, 16 December 1999, 24 December 1999, 30 December 1999, 31 December 1999, 04 January 2000, 07 January 2000, 20 January 2000, 24 January 2000 and 28 January 2000 and no prejudice had been caused to the appellant. ANALYSIS AND DECISION: 12. Having given our due consideration to the submissions advanced by the learned counsels for the rival parties at the Bar and on meticulous perusal of the record, we firstly deal with the first limb of the demand that pertains to the variations in the physical stock vis- -vis the quantity shown in the books of account. In this regard, it would be relevant to extract the reasons that prevailed in the mind of the Assessing Authority, which read as under: .One diary was also in this record. Page No. 14 of this diary reads MRG-20Kg.-2142-20.09.96 and etc. The dealer state that MRG stand for Magat Ram Gupta and the stock of the batches was lying with the dealer but same has not be returned by the MRG to Company. Page-15 of the same dairy reads BAWD having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar nature and page No. 178 also remained unexplained on the ground that his record was with in charge of Spread Coating Unit and he was not available. The visiting team also reported the physical stock position but could not calculate variation at various places since the rates list were hot provided. The dealer was issued ST-32 31 and he filed trading accounts on 3.10.96 in terms or quantity and not in value. It was further explained that there has not been any suppression as most of the record has been explained the remaining could not be explained on account of the officer in charge on leave, the record was with him. The above mentioned record which pertain to sale and purchase stock was neither found as recorded in its books nor satisfactorily explained cannot be over looked moreover large variation has been noticed at one of the branches and similarly all other places of the business. Therefore version of the dealer that there is no suppression is not convincing one. In view of finding mentioned above like variation in stock, unsatisfactory explanation of the adverse material discussed above, interstate sale in the shape of transfer of goods procedure, the return ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the demand on account of the purported stock transfer made by the appellant, which has been treated as inter-State sales. Again, it would be relevant to reproduce the reasons assigned by the Assessing Authority, that read as under: The Officers from the Enforcement Branch visited dealer's premises on 03.10.96 for survey etc. They found certain papers, registers and other documents which the dealer could not explain property and thus the same were surrendered in the visiting Officers at its various places/additional places of business. The dealer was confronted with such material. He produced sales bill, Sales Tax Account Registers, Stock register and other excise record. Some papers were verified from the such records. One gate pass book containing gate passes No 501 to 533 written (rest blank) was also surrendered and gate pass No. 502 dated 10.09.96 reads GZBD(NTPC) and it has a quantity 4000 pack. The dealer explained that these goods were transferred to Gaziabad Branch and the bill was raised by the Gaziabad Branch in favour of NTPC. Similarly Gate No. 504 dated 13.09.96 containing 4000 packs to Faridabad (Fedco pnp). It was explained that these good were sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods on hire-purchase or any system of payment by instalments; (iv) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (v) a supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, but does not include a mortgage or hypothecation of or a charge or pledge on goods;] xxxxxx 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority are contrary to law, and such reassessment or revision may be done in accordance with the provisions of general sales tax law of the State.] 17. On a conjoint reading of the aforesaid provisions, it is clearly brought out that sale is transfer of property in goods from one person to another for cash or deferred payment or for any other valuable consideration. In other words, sale is transfer of ownership in the goods as per any contract between seller and the buyer, and it is pursuant to a contract of sale that when goods move from one State to another that Section 3 of the CST Act comes into play. Without further ado, we find that in the instant matter learned DVATT failed to appreciate that except for 5 gate passes that showed movement of goods from Delhi to the branches outside Delhi NCR, there was no other material available so as to conclude that such movement of goods had been effected pursuant to any sale as between the appellant and the buyers. Therefore, no presumption in law is invited merely because the goods moved from Delhi to the depots/warehouses or storage facilities of appellant outside Delhi. At the cost of repetition, unless and until movement of go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of goods from one State to another is result of a covenant or incident of the contract of sale, and the property in goods passes in either State . It was held further held that with a view to find out whether particular transaction is an inter-State sale or not, it is essential to see whether there was movement of goods from one State to another as a result of prior contract of sale or purchase . On a conjoint reading of Section 3 and Section 6A of the CST Act, the legal proposition was explained as under: 18. What follows from a conjoint reading of these provisions is that every dealer is liable to pay tax under the Central Act on the sale of goods effected by him in the course of inter-State trade or commerce during the year of assessment. Where the department takes advantage of the presumption under Section 3(a) and/or to show that there has been a sale or purchase of goods in the course of inter-State trade or commerce and if the assessee disputes that there has been a sale or purchase of goods in the course of inter-State trade or commerce, then the assessee can rebut the presumption by filing declaration in form F under Section 6A of the Central Act to prove tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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