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2014 (5) TMI 647 - MADRAS HIGH COURTExemption u/s 6(2) of the CST Act – Mode of proof – Proof by endorsing the document in the title – Held that:- The burden of proving second inter-State sale rests on the assessee – Relying upon The Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai [1967 (7) TMI 107 - MADRAS HIGH COURT] Court held that:- Making endorsement in the document of title is not the only mode to prove a second inter-State sale – There may be other modes by which the claim can be substantiated - However, when the assessee claims exemption based on the endorsement made in the documents of title or chooses any other mode, it must discharge its burden to the satisfaction of the AO that, there was a second inter-State sale that the assessee had not taken delivery of the goods to break the link in the chain of movement. The assessee admittedly attempted to prove its claim by endorsing the document in the title - However, a reading of the endorsement on the back of the goods consignment notes show the instruction only - Beyond the words thus recorded therein giving direction for delivery, absolutely there was no material to point out the time on which such an endorsement was made to claim second inter-State sale - Thus in the absence of any material to substantiate this fact, it is difficult for anyone to come to the definite conclusion on the basis of the instructions noted that the endorsement was in fact made by the assessee company at Coimbatore before delivery - In the absence of any material to substantiate its claim that the endorsement made thus in fact satisfied the requirements for showing that the assessee had not taken delivery and that the assessee had effected inter-State sale without breaking the movement to claim the benefit of Section 6(2) and in the absence of satisfactory proof thus let in, there is no hesitation in confirming the order of the JC confirming the assessment. No physical delivery - Endorsement in Form XX - Held that:- As the assessee had not substantiated the in-transit sale by choosing one or other mode, it goes without saying that the burden not discharged to the satisfaction of the authority that there was, in fact, second inter State sale, the claim of the assessee that mere endorsement of giving delivery instruction could not be taken as a substantial evidence of in-transit sale - Thus, the Tax Case dismissed – Decided against assessee.
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