9911796707
TMI Blog2024 (12) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... esult, the appellant became liable to pay additional Central Sales Tax [CST] of Rs. 1,44,069/- for Assessment Year [AY] 1996-1997. 3. The facts which led to the issue of this order are that the appellant is a proprietary concern manufacturing talcum powder under the brand name "Z". It had its head office and manufacturing unit in Coimbatore, Tamil Nadu and a branch office at Palakkad in Kerala. It was registered with the Sales Tax Authorities of both States. The appellant was in business only for three assessment years viz., AY - 1994-1995, 1995-1996 and 1996-1997. 4. The appellant had entered into an agreement dated 28.06.1994 with M/s Argus Cosmetics Pvt. Ltd.[ Argus], Chennai for sale of its cosmetic products. 5. The Tamil Nadu Sales Tax Enforcement Wing at Coimbatore inspected the appellant's premises and records for years 1994-1995 and 1995-1996 based on which the assessments were re-opened and revised by the Assessing Authority by separate orders dated 30.10.1998 and penalties were also imposed on the appellant. 6. By a separate original assessment order dated 30.10.1998 for AY 1996-1997 the Assessing Authority disallowed the appellant's claim for exemption fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the judgment of the Supreme Court in Indian Oil Corporation Ltd. versus Union of India [47 STC 1], the Sales Tax Appellate Tribunal held that the sales for this period by the appellant in Kerala through its branch in Palakkad were interstate sales and these are valued at Rs. 90,39,554/- but upheld the assessment for the remaining turnover of Rs. 66,07,846/- during AY 1996-1997. Submissions on behalf of the appellant 12. Learned counsel for the appellant made the following submissions :- (i) It is seen from the Tamil Nadu CST Assessment orders for AY 1994-1995, AY 1995-1996 and AY 1996-1997 that the appellant's claim of branch transfer/exemption from CST has been allowed fully for AY 1994-1995 and AY 19951996, and partially for AY 1996-1997 for the period after the date of inspection (i.e. from 29.08.1996 to 31.03.1997) as per impugned order. (ii) Thus, in all the three AYs put together, the appellant's claim of branch transfer/exemption from CST has been disallowed by TNSTAT only for about five months, i.e. from 01.04.1996 to 28.08.1996, in AY 1996-1997 purportedly based on D-7 records, which is unsustainable. (iii) D-7 records did not contain any purchase orders of Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of D-7 records. (vii) For AY 1996-1997 the appellant had claimed CST exemption on a turnover of Rs. 1,65,66,786/- against 34 'F' Forms. However, neither the Assessing Authority, nor TNSTAT in the impugned order, have referred to 'F' Forms submitted by the appellant, which formed part of the records. The appellant has filed all the 34 'F' Forms before this Hon'ble Authority. (34 'F' Forms submitted by the appellant for AY 19961997 @ pages 1-34 of additional documents filed by the appellant as a separate paper book on 03.12.2015). The submission of 'F' Forms established the bona fides on the part of the appellant and hence the appellant's claim for exemption should have been allowed in full by TNSTAT based on the 'F' Forms. (viii) The inferences drawn by TNSTAT and the conclusions based on such inferences are not reasonable, as they are based on surmises and conjectures". 12.1 Learned counsel for the appellant prayed that the impugned order may be modified and the assessment for the year 1996-1997 to the extent it is upheld by the impugned order may be set aside. 13. As an alternative plea, learned counsel submitted that if the sales are held to be inter-state sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of goods by the appellant from its factory in Coimbatore to its depot in Palakkad in Kerala during from 01.04.1996 to 28.08.1996 were inter-state sales or branch transfers. It is undisputed that the goods were transferred from Coimbatore to appellant's own depot in Palakkad. 19. As per section 6A of the CST Act, where any dealer claims that he is not liable to pay Central Sales Tax in respect of any goods on the ground that the movement of such goods from one State to another was NOT occasioned by sales, the burden of proof rests on the dealer. In other words, if the dealer claims that the goods have been transferred to its own depot or branch in another State and, therefore, no Central Sales Tax was payable, the burden of proving so rests on the dealer. If he fails to do so, the dealer has to pay the Central Sales Tax. The presumption in case of goods transferred from one State to another is that it is occasioned by sales of goods, but this presumption can be rebutted. 20. The appellant had submitted "Forms F" in respect of the goods indicating that the goods were only transferred to its branch in Palakkad in Kerala for the entire year. 21. The D-7 records recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.K. RAMESH AUTHORIZED SIGNATORY" 8. As such the following Palakkad branch invoices were sent to Tvl. Argus Cosmetics Limited, Chennai by the dealerappellants from Head Office, Coimbatore through the following slips : Slip No. Branch Invoice No./Date Quantity 1 Br. 001/02.04.96 200 Cartons of 200 gms. 2 Br. 003/10.04.96 Br. 004/11.04.96 210 Cartons of 100 gms. 6 Cartons of 200 gms. 12 Br. 007/02.05.96 200 Cartons of 100 gms. & 200 Cartons of 200 gms. 15 Br. 008/07.05.96 200 Cartons of 100 gms. 23 Br. 011/20.05.96 Br. 012.20.05.96 Br. 013/20.05.96 150 Cartons of 200 gms. Each 25 Br. 016/01.06.96 250 Cartons of 100 gms. 29 Br. 009/18.05.96 Br. 010/18.05.96 250 Cartons of 200 gms. 150 Cartons of 100 gms. 39 Br. 025/27.07.96 Br. 026/28.07.96 200 Cartons of 100 gms. 250 Cartons of 200 gms. 9. In the slip nos. 10, 30, 31 and 40, entries related to dispatch instructions given by Tvl. Argus Cosmetics Limited, Chennai to the dealer-appellants found. The extract of slip no. 10 is as below: Despatch instructions for Tvl. Ansa Cosmochems for April, 1996 Priority Date dispatch of Destination Quantity Z-100 gms. Quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been placed well in advance in the form of dispatch instructions. Even the date on which goods to be dispatched, priority and quantity to be supplied to Ernakulam Branch of Tvl. Argus Cosmetics Limited, Chennai known to dealer-appellants' Head Office at Coimbatore. In this connection, it is to be noted that the dealer-appellants effected direct inter-state sales u/s. 3(a) of the Act for other State branches of Tvl. Argus Cosmetics Limited, Chennai like Bangalore and Secunderabad, but the sales to Ernakulam Branch of Tvl. Argus Cosmetics Limited were routed through Palakkad branch of dealer-appellants. 13. The slip nos. 1, 2, 12, 15, 23, 25, 29 and 39 of file marked 'A' clearly indicated that the Head Office of the dealerappellant sent copies of invoices raised by their Palakkad Branch to Tvl. Argus Cosmetics Limited, Chennai who had placed orders to supply the goods to their branch at Ernakulam in Kerala State. Apart from this, Tvl. Argus Cosmetics Limited in turn paid consideration for supply of goods through Palakkad Branch directly to the Head Office of dealer-appellants at Coimbatore by way of Demand Draft/Cheque. Above all, stock position of various raw materials and fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o- 4,19,186.88 30 Days 523990 4,19,186. 88 020178/ 15.5.96 Nil 7. Br 007/ 30.04. 96 200 C/s 200 C/s -do- 5,97,912.00 30 Days 523993 4,76,360. 00 745018/ 28.5.96 1,21,552.0 8. Br 008/ 07.05. 96 200 C/s --- -do- 3,45,945.60 30 Days 523930 2,50,000. 00 --- --- 9. Br 009/ 18.05. 96 --- 250 C/s -do- 3,05,340.10 30 Days 524101 --- --- --- 10. Br 010/ 18.05. 96 150 C/s --- -do- 2,59,459.20 30 Days 524102 3,50,000. 00 Ch. No. 745476 of 04.6.96 --- 11. Br 011/ 20.05. 96 --- 150 -do- 1,83,204.00 30 Days 524103 3,50,000. 00 Ch. No. 745476 of 04.6.96 --- 12. Br 012/ 21.05. 96 --- 150 -do- 1,83,204.00 30 Days 524104 1,45,000. 00 --- --- 13. Br 013/ 21.05. 96 --- 150 -do- 1,83,204.00 30 Days 524105 1,67,848. 43 Ch. No. 000949 of 05.6.96 15,355.57 14. Br 014/ 30.05. 96 200 --- -do- 3,59,654.40 18.6. 96 --- 3,40,364. 00 020212/ 17.6.96 19,290.40 15. Br 015/ 31.05. 96 200 --- --- 3,59,654.40 --- --- 3,13,706. 00 --- --- 16. Br 016/ 31.05. 96 250 --- --- 4,31,424.00 --- --- 3,43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y destined to Ernakulam Branch of Tvl. Argus cosmetics Limited, Chennai. From the above, it is very clear that the Palakkad Branch was used only as conduit pipe in order to sell the goods to Ernakulam Branch of Tvl. Argus Cosmetics Limited. 16. As observed by the Hon'ble CSTAA, New Delhi the nature of the documents recovered by the Enforcement Wing Officers at the time of inspection have been examined and analysed as above and convinced that the above records clearly established that the dealer-appellant camouflaged the direct inter-state sales as stock transfer. In this connection, it is necessary to go through the judicial decisions rendered by the various courts, in similar circumstances. ....... 25. ..... In view of the above fact, we hold that the assessment made on the turnover over and above Rs. 90,39,554/- to tax is arbitrary and not sustainable and therefore we sustain only the turnover of Rs. 90,39,554/- and deleted the remaining turnover of Rs. 66,07,846/-." 23. Based on the above records, Sales Tax Appellate Tribunal recorded in the impugned order a finding that sales had occasioned the inter-state movement of goods and for that reason, central sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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