TMI Blog2010 (2) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... time of original assessment. The business was being run by the appellant's husband P. K. Ramesh, who was manager and power of attorney holder. He died in the year 2002. The assessments made in the years 1994-95 and 1995-96 were revised by the Commercial Tax Officer, Trichy Road Circle, Coimbatore, by the orders passed on October 30, 1998 and the stock transfers to Kerala were treated as inter-State sales. In the absence of C forms, the turnover was subjected to tax at double the normal rate, i.e., at 20 per cent. Penalty was also levied. It is not in dispute that the same transactions which were held to be inter-State sales were treated as local sales effected through the branch in Kerala and tax was levied and collected under the Kerala General Sales Tax Act, 1963 at the rate of 20 per cent. It may be mentioned at this juncture that if inter-State sales were effected and C forms were filed by the dealer, the appellant would have been liable to pay Central sales tax only at four per cent. The assessments of the appellant for the year 1994-95 and 1995-96 were reopened and revised on the basis of the certain material recovered by the officials of ST Enforcement Wing at Coimba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were listed for hearing only in November 2008, i.e., after a long gap of eight years. Before hearing, he tried to contact Mr. P.K. Ramesh and he came to know that Mr. P.K. Ramesh passed away in the year 2002. He then states that he was not successful in his attempt to inform Mrs. Ramesh, i.e., the appellant. Even after the order was received, he could not get in touch with Mrs. Ramesh. The authorized representative further states that on February 5, 2009, he received a telephonic call from Mrs. Hemalata Ramesh (wife of Late Mr. P.K. Ramesh). Then, he apprised her of the adverse order of the Tribunal. She met him on February 6, 2009 and received the orders of the Tribunal. Then, after taking legal opinion, steps were taken to file the appeals before this Authority. The appellant's counsel has stated in the course of hearing that the appellant came to know of the adverse order passed by the Tribunal only after the sales tax officials came to her house for demanding the tax on January 29, 2009 and thereafter the necessary information was gathered by a family friend. In the circumstances stated above, undoubtedly, there is sufficient cause for preferring the appeals belatedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r makes will be binding on the assessee. Thus, it appears that the authorization would be effective for the purpose of representing the assessee in the proceedings before the Tribunal. Specific authority has not been conferred on the authorised representative to receive the order after the proceedings are concluded before the Tribunal. Such authority is normally found in the vakalats filed by legal practitioners. In contrast with the language of regulation 23 in regard to the communication of the Tribunal's order, regulation 32 concerning the service of notices enjoins that the notice shall be served in the manner prescribed in rule 52 of the TNGST Rules and an acknowledgment containing the signature of the addressee or the legal practitioner appointed to represent the addressee before the Tribunal or of the authorized representative of the addressee or an endorsement by postal authorities that the notice was refused by the addressee shall be deemed to be sufficient to hold that the notice was duly served. Obviously, in the instant case, regulation 23 applies and the communication of final order is not in accordance with regulation 23. It may be that in a case where the final o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. The scope of section 3 of the CST Act was aptly analyzed by the Supreme Court in Tata Iron and Steel Co. Limited v. S. R. Sarkar [1960] 11 STC 655 in the following words (at page 667): In our view, therefore, within clause (b) of section 3 are included sales in which property in the goods passes during the movement of the goods from one State to another by transfer of documents of title thereto: Clause (a) of section 3 covers sales, other than those included in clause (b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State. We are concerned here with clause (a) of section 3. It was clarified by the Supreme Court in the case of Kelvinator of India Ltd. v. State of Haryana [1973] 32 STC 629 that . . . A movement of goods which takes place independently of a contract of sale would not fall within the ambit of clause (a) of section 3 . As observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed for all purposes of this Act to have been occasioned as a result of sale). Ashok Leyland Ltd. v. State of Tamil Nadu [2004] 3 SCC 1; [2004] 134 STC 473) (The bracketed words were added by Central Sales Tax (Amendment) Act, 2002). (2) If the assessing authority is satisfied after making such inquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer under sub-section (1) are true, he may, at the time of, or at the time before, the assessment of tax payable by the dealer under this Act, make an order to that effect and thereupon the movements of goods to which the declaration relates shall be deemed for the purposes of this Act to have been occasioned otherwise than as a result of sale. The declaration referred to in section 6A is prescribed by rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules and it is known as form F. Now we shall refer to the relevant passages in the decision of the Supreme Court in Ashok Leyland Ltd. v. State of Tamil Nadu [2004] 134 STC 473; [2004] 3 SCC 1 which interpreted section 6A(2): When the dealer furnishes the original of form F to its assessing authority, an enquiry i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted cases of fraud, misrepresentation or suppression of material facts that the reassessment can be resorted to. It was further made clear that reassessment is impermissible on the ground of a mere error of judgment, or change in opinion. That is how the deeming provision in section 6A(2) was viewed by the Supreme Court. Appeals relating to the assessment years 1994-95 and 1995-96 On the basis of the alleged incriminating material recovered by the inspecting authorities on August 28, 1996 and the statement given by the manager (husband of proprietrix), the assessments were made. The incriminating material in the form of letters, slips, purchase orders and despatch documents all relate to the assessment year 1996-97 but do not relate to the years 1994-95 and 1995-96. The assessing authority as well as the Tribunal placed reliance on this material which is really not relevant for these two assessment years in question. The other document relied upon by the assessing and appellate authorities is the statement of the appellant's husband who was present at the time of inspection of the business place at Coimbatore on August 28, 1996. We have perused the translated copy of the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the appellant that local sales were being effected to the dealers outside the State through Palakkad branch. The principal office at Coimbatore receiving the cheques and drafts is not inconsistent with the fact that the transactions were routed through the branch. Thus, we do not find any basis for the reassessments made under the Central Sales Tax Act by treating the local sales effected in Kerala as inter-State sales from Coimbatore. There is one more reason as to why the reassessment is unsustainable. In the present case, as far as the assessment year 1994-95 is concerned, the appellant is entitled to invoke the benefit of the deeming fiction enacted by section 6A(2) and the conclusive proof implicit in it. At the time of original assessment made on March 29, 1996 (for the year 1994-95), F forms submitted by the appellant as per the requirements of section 6A were accepted. In fact, the assessing authority, before accepting the F forms, insisted on filing other supporting documents. It is seen from the assessment order dated March 29, 1996 that only after the relevant documents were filed, the assessing authority acted on the F forms evidencing the branch transfers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the ultimate buyers when the goods were moved from Coimbatore to Palakkad. That claim was not accepted by the assessing authority on the basis of material that came to light in the course of inspection by Enforcement Wing officials on August 28, 1996. The details of alleged incriminating material in the form of slips and correspondence has been referred to in detail by the assessing authority. Moreover, the statement of late Shri P. K. Ramesh (the husband of the proprietrix) was also relied upon. After rejecting the claim for exemption, the assessing officer determined the taxable turnover under the CST Act at Rs. 2,04,92,349. The admitted turnover of Rs. 48,44,949 for which C forms were filed was subjected to tax at four per cent. In regard to the disputed turnover of Rs. 1.56 crores, penalty was also levied. On appeal, the Additional Appellate Commissioner (CT), Coimbatore confirmed the assessment. However, he set aside the penalty levied and directed to levy appropriate penalty in accordance with the observations made by him. Aggrieved by the order of the Appellate Assistant Commissioner confirming the assessment, the appellant has preferred the appeal to the Tribunal which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt seems to furnish a broad framework for the business dealings between the parties and does not by itself give rise to contracts of sale. Moreover, the slips and correspondence mostly related to April 1996 and the first week of May 1996 whereas the transactions for the subsequent period also were presumed to be of the same character. The fact that the demand drafts were sent to the appellant's office at Coimbatore for the consignments sold to Argus Cosmetics within and outside Tamil Nadu, as observed earlier is not very material because even in respect of the supplies effected by the branch also, the payments could very well be made to the dealer at Coimbatore. It is a different matter if such payments were made in advance and they are correlated to the dispatches made thereafter to Palakkad and the deliveries effected at Ernakulam. The assessing authority generalized the transactions and commented that the goods moved from Coimbatore to Palakkad/ Ernakulam only pursuant to the dispatch instructions given by Argus Cosmetics and at the commencement of inter-State movement itself, the identity of the buyer was known. As regards the existence of the branch at Palakkad the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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