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TMI Blog2015 (3) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 3(a) of the Central Sales Tax Act?". 2. In these appeals, the assessee is a registered dealer; it trades in cotton yarn. For the relevant assessment period, it had contended and relied upon several documents to establish that 26 inter state sale transactions have been concluded with M/s Shree Bharat International Pvt. Ltd, an UP based registered dealer. The assessee's returns were subjected to default assessment. It preferred objections before the Objection Hearing Authority i.e. Additional Commissioner. The contention made was that the VATO fell into error in rejecting 6 out of 26 transactions as inter state sales. There is no dispute that 20 such transactions with the said UP dealer were accepted as inter state sale. They wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently the claim of stock transfer was rejected by VATO (Audit) and sales in question were treated local sales and taxed accordingly. However the objector during the course of hearing of objections has also not produced relevant documents i.e. GRs/RRs, which used for transportation of goods. Accordingly, the orders/notices of default assessment of tax, interest and penalty issued in this regard are legally valid and therefore, upheld." 3. The assessee felt aggrieved and approached the VAT Tribunal contending that the findings of the OHA on the issue of inter state sales were untenable. The relevant findings of the VAT Tribunal in the impugned order, after noticing the provisions of Section 3 of the Central Sales Tax Act, are as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods from one state to another any subsequent sale during such movement effected by transfer of document of title to such goods to a registered dealer shall be exempt from tax and not otherwise. In the present case, the appellant is not able to prove on record that the goods occasioned the movement from one state to another and hence, the claim of the appellant for inter-State sale under such a situation cannot be granted. The appeal of the appellant in this respect is, therefore, rejected." 4. Mr. Srivastava, counsel for the appellant, relies upon the Gujarat High Court judgment reported as Commissioner of Sales Tax V. Pure Beverages Ltd. (2005) 142 STC 522 (Gujarat). Learned counsel particularly relied upon the following observations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moved or not from this State to State of Rajasthan. The department does not undertake the requisite exercise, ignores the evidence produced by the assessee and merely presumes a state of affairs not warranted in law or on facts. "Before the department rejects such evidence, it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession. The department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof." 5. Counsel for the revenue highlighted that in the present case, unlike in the case of the 20 transactions which were accepted as inter state sales, the authorities rejected the assessee's contentions ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State." 7. The above provision has been interpreted in several judgments of the Supreme Court, Tata Iron and Steel Company Ltd. V. S R Sarkar, AIR 1961 SC 65; Tata Engineering and Locomotive Company Ltd. V. Assistant Commissioner of Commercial Tax, 1970 26 STC 354 and Kelvinator of India Ltd. V. State of Haryana, (1973) 2 SCC 629. In each of these decisions, it was underlined that a movement of goods under a covenant or an incident of the contract of sale is the subject matter of Central Sales Tax. In other words, movement of goods independent of contract of sale would not fall within the ambit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egetables Products (1996) 101 STC 547 to conclude that the tender of a C form by the selling dealer raises a fundamental presumption that the purchasing dealer is a registered dealer. However, that is as far as the presumption can be taken. As to whether the transaction itself was covered by an inter state sale or otherwise is a burden that the assessee has to discharge, that it did so in other 20 cases but was unable under these 6 cases precisely underscores or highlights the burden placed upon it. In these circumstances, the Court is of the opinion that the substantial question of law sought to be urged by the assessee has to be answered against it and in favour of the revenue.
9. The appeals are consequently dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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