TMI Blog2004 (12) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the assessing authority requires to be revised, since the same is improper, illegal and prejudicial to the interest of the Revenue and therefore, had referred the matter to the revisional authority to initiate proceedings to revise the order passed by the assessing authority for the assessment period in question. 2.. The revising authority after verifying the form "F" declarations produced by the assessee before the assessing authority in support of its claim of stock transfer, being of the view that the assessing authority without verifying any of the transactions relating to the consignment transfer and the movement of goods thereon, has mechanically accepted the "F" form declarations, had issued notice to the assessee under section 22-A(1) of the KST Act, inter alia, directing him to show cause why the order passed by the assessing authority for the assessment year in dispute under the CST Act should not be revised and a direction to the assessing authority to redo the assessment in so far as CST assessments should not be passed. The revising authority after considering the objections filed in response to the notice, had set aside the order passed by the assessing au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "F" form declarations produced, had issued one more revised proposition notice, proposing to determine the total and taxable turnover for the period November 1, 1978 to October 21, 1979 at Rs. 89,04,733.50 and Rs. 89,04,733 respectively, since it failed to produce the books of accounts and other relevant documents in support of its claim of stock transfer of cotton yarn amounting to Rs. 89,04,733.50 to its branch office at Ponda-Goa made in form 4 returns filed for the period ending on October 20, 1979. In the notice so issued, the dealer was called upon to produce the dispatch particulars, sale bills of the branch for having sold the goods received by way of stock transfer to its customers that the goods received at its branch was not pursuant to any prior contract with the purchasers. It was also informed to the assessee that if the dealer fails to produce the required document in support of its claim of stock transfer of cotton yarn to its branch office at Ponda-Goa, the proposal made in the revised proposition notice would be confirmed. Though the notice was served on the assessee, since it did not respond to the notice, the assessing authority has concluded the best judgment a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved to be false and it is further stated that the assessing authority having not pointed out any pre-existed order with the Goa Branch and at the same time, such pre-existing orders are wrongly presumed, the assumption of the assessing authority is contrary to the provisions of section 3(a) of CST Act, 1956. Lastly, the assessing authority could not have drawn adverse inference merely because the assessee failed to produce the books of accounts in support of its claim of stock transfer to its branch office at Ponda-Goa, since under rule 26(10) of the Karnataka Sales Tax Rules, 1957, the assessee is expected to keep the books of accounts only for a period of five years from the end of the assessment year. 7.. The first appellate authority, while considering the appeal filed by the assessee has raised only one question for his consideration and decision, i.e., whether the order of assessment passed by the assessing authority is in accordance with law? While answering this issue, the first appellate authority firstly notices that the assessing authority has drawn adverse inference against the assessee, since it failed to produce books of accounts and other evidence to prove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. The revisional authority in its notice proposed to set aside the order passed by the first appellate authority on the ground that the first appellate authority had wrongly granted exemption from payment of tax under the CST Act without verifying anything including the books of accounts by treating the appellant's transaction with its branch office at Ponda-Goa as stock transfer and therefore, had directed the assessee to show cause why the order passed by the first appellate authority dated December 21, 1993 should not be set aside and restore the assessment order passed by the assessing authority under section 9(2) of the CST Act, 1956 dated January 7, 1993. 9.. In response to the notice, the appellant had filed its reply by way of objections contending, among other grounds, that the order passed by the first appellate authority is neither erroneous nor prejudicial to the interest of the Revenue for the revisional authority to invoke revisional powers conferred under section 22-A(1) of the Act, 1957. 10.. The revisional authority by his order dated March 2, 1998 has confirmed the proposal made in the show cause notice dated December 11, 1997 and in that, has considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant on the said decision. A division Bench of the apex Court in Ashok Leyland Ltd. v. Union of India [1997] 105 STC 152, had observed that an order passed by the assessing authority under this section accepting form "F" could be reopened by that authority at the time of final assessment or even in reassessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959. But a larger Bench of the apex Court in Ashok Leyland Ltd. v. State of Tamil Nadu [2004] 134 STC 473 has overruled this decision only on this point and has held that the separate order accepting the correctness of form "F" filed by an assessee is final and cannot be reopened at all unless that order was obtained by fraud, collusion, misrepresentation or suppression of material facts or giving or furnishing false particulars or when that order was illegal or void ab initio or otherwise voidable. Mere change of opinion of the assessing authority will not confer jurisdiction on that authority to reopen the proceedings but discovery of new materials giving rise to jurisdictional error may be a ground for reopening. In our opinion, the Supreme Court nowhere in the order has observed that once the form "F" declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en on the assessee to prove that the transaction is not a sale prior to the date of coming into force of the amendment made to sub-section (1) of section 6-A of the CST Act, 1956, that is prior to May 11, 2002. The filing of form "F" by a dealer who sent the goods to another State on consignment or stock transfer was optional and he could prove his claim for non-levy of tax under the Act by producing alternative evidence such as correspondence, delivery challans, etc. Submission of "F" form declarations is not conclusive evidence that the movement of goods is a branch transfer/stock transfer and not a sale. The sales tax authorities can investigate and make enquiries whether the declaration is genuine and true and reject the "F" forms, if the transaction is found to be not genuine. Section 6-A of the CST Act, 1956 lays down a particular mode of proof and it is implied that the production of such proof will dispense with the necessity of adducing any other or further evidence and will suffice for the grant of the benefit. But section 6-A(2) of the CST Act, 1956 goes a little further and provides for the possibility of an enquiry being conducted by the assessing authority. It is open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business. This appears to be settled legal position in law. Therefore, reference to various decisions of this Court and other courts may not be necessary. 16.. In the present case, initially the assessing authority while concluding the assessment under the CST provisions had not verified any of the transactions relating to consignment sales and had accepted the form "F" declarations and had declared that the CST turnover of the assessee as "non-assessable". This order came to be reviewed by the revisional authority and being of the view that the assessing authority without proper verification of "F" form declarations could not have granted exemption from payment of tax under the CST Act, had remanded the matter to the assessing authority to pass a fresh order in accordance with law after verifying each one of the transactions declared in form "F" declaration. The assessee had questioned the remand order unsuccessfully both before the Karnataka Appellate Tribunal and also before this Court. 17.. In pursuance to the remand order passed, the assessing authority had directed the assessee to produce the books of accounts and other records, if any, to support its claim of branch tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the Bombay High Court in the case of Commissioner of Sales Tax v. Ramdas Laxmidas [1976] 38 STC 354. In the said decision, the Bombay High Court was considering the provisions of section 12-A(3) of the Bombay Sales Tax Act, 1946 and rule 41-A of the Bombay Sales Tax Rules, 1946 and the issue before the court was whether an assessee under the Act was obliged to present the books of accounts and documents even after completion of assessment proceedings? While answering this issue, the court has noticed that "the rule of prudence that even after the expiry of the statutory period, the dealer, though not under any statutory obligation to do so, should preserve his evidence until the proceedings are completed, would apply not only until the conclusion of the assessment proceedings but also till the disposal of any appeal, revision or reference therefrom but not thereafter." 19.. Rule 26(10) of the Karnataka Sales Tax Rules, 1957 provides for the time-limit to preserve the account books, declarations, etc., by a dealer under the Act. 20.. Rule 26(10) reads as under: "The accounts maintained by dealers and licensees together with all vouchers, bills, declarations, way-b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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