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2015 (3) TMI 785 - DELHI HIGH COURT

2015 (3) TMI 785 - DELHI HIGH COURT - [2015] 84 VST 570 (Del) - Classification of sale - Whether the Tribunal fell into error in rejecting the assessee’s contention that the goods in question were inter state sales within the meaning of Section 3(a) of the Central Sales Tax Act - Held that:- assessee was able to substantiate its contention that 20 of the transactions were, in fact, inter state sales. This was because each one of them had the necessary supporting document in the form of GRs. Howe .....

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here is no presumption either way that an inter state sale claimed by the assessee is one per se - 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 - Decided against assessee. - ST.APPL. 72/2014, ST.APPL. 68/2014, ST.APPL. 69/2014, ST.APPL. 70/2014, ST.APPL. 73/2014 - Dated:- 17-3-2015 .....

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he 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 e .....

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, inter state sales under Section 3 of the Central Sales Tax Act. The OHA too concurred with the findings of the VATO. The relevant discussion by the OHA in this regard are as follows : 2. DVAT-38 application, it has been pleaded that rejection of transactions/outward stock transfer on the ground of non production of GRs is not legally justified as the material send by Tempos. He further stated that all the transaction made through by challans and therefore the orders/notices of default assessme .....

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nt 3 C forms 4. From perusal of documents submitted by the objector, it is evident that the dealer has failed to produce GRs/RRs in support of claim of stock transfer. Consequently 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 o .....

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nt of goods. The prime requirement for movement of goods is GR/RR. The submission of the Ld. Counsel for the appellant that GRs were not issued due to the exporter‟s own procedure is not satisfactory. The actual movement of goods from one State to another cannot be judged by documents like bank statement, retail invoice, C‟ forms, etc. Further, no Form 38 stated to be issued to the appellant is actually placed on record. Even the stamp of the security department does not mention the .....

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ified in section 3 of the Central Act stand fulfilled . In such a situation when there is no conclusive proof of movement of goods, even the judgment referred to above does not help the case of the appellant. In this connection, reference made to Section 6(2) of the CST Act which also provide that where a sale of any good in the course of inter-state trade or commerce has either occasioned the movement of goods from one state to another any subsequent sale during such movement effected by transf .....

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rted as Commissioner of Sales Tax V. Pure Beverages Ltd. (2005) 142 STC 522 (Gujarat). Learned counsel particularly relied upon the following observations of the Gujarat High Court:- In the present case, therefore, the assessee had claimed that the transactions in question were governed by Section 3(a) of the Central Act, that it was liable to be charged with tax under the said provision, but the department disputed the said averment. The contention of the department that the assessee ought to h .....

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ue would like the court to raise a presumption that the purchaser must have diverted the goods after having taken delivery of the same at the factory gate. Not only does the Revenue fail in discharging the onus which is on it, but the presumption that it wants to draw is far-fetched in absence of any evidence to show that such an exercise had been undertaken by the purchaser. The assessee herein, namely, the selling dealer had submitted C forms. It was open to the department to verify the genuin .....

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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 based upon a factual analysis. At the outset learned counsel for the revenue urged that no question of .....

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cted. 6. Section 3 of the Central Sales Tax Act is as follows :- 3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.-A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1.-Wher .....

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ass 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 .....

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