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2024 (1) TMI 297 - HC - VAT and Sales TaxDetention of goods - detention on the ground that goods were not accompanied with the proper and genuine documents and that the petitioner had made an attempt to evade tax - HELD THAT:- The plea of the petitioner that the transaction is not taxable, is a bonafide plea and in the absence of either mis-declaration or concealment, it has to be held that the exercise of power of imposing penalty at Check Post, was not warranted. Undoubtedly, sale against From-C and Form E-1 is exempt from CST under Section 6(2) of the CST Act ; Form-C needs to be furnished by the seller to the prescribed authority of the Seller’s State; so the onus is on the State from where the goods are being sold to ensure that the Form against which such sale is being conducted, is legitimate and genuine - the finding in the impugned order regarding genuineness of the statutory Forms C and E-1, issued by the Excise & Taxation Department of the other States, is unwarranted , perverse and contrary to law. In ONKARLAL NANDLAL VERSUS THE STATE OF RAJASTHAN AND ANOTHER [1985 (9) TMI 314 - SUPREME COURT] the Supreme Court held that there is no antithesis between a sale in the course of inter-State trade or commerce and a sale inside the State. Even an inter-State sale must have situs, and the situs may be in one State or another. It is held that the ETO at the Barrier or the Check Post, in the facts and circumstances of the case, could not have examined the nature of the sale transaction and act beyond the limited jurisdiction of examining the documents, accompanying goods, and impose a penalty on a transaction not otherwise liable to tax under the Act; and that the impugned order is perverse for not considering the fact that the Assessing Authority, in the assessment order dt. 04.09.2008, passed for the Assessment Year 2006- 07, had accepted the Returns filed by the petitioner and had not imposed any tax on the transaction disputed in the impugned order. It is also held that the genuineness of the Form-C and Form E-1, cannot be doubted by the Excise & Taxation Authorities in Himachal Pradesh. The respondents are directed to refund the penalty collected with interest at the rate of 6% per annum from the date on which the said amount was taken from the petitioner till the date of repayment - the Revision is allowed.
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