TMI Blog2015 (9) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... influenced by the ST-2 Account filed by the purchasing dealer and the fact that the purchasing dealers were not found in existence at the time of making the remand assessment order. We find it difficult to sustain the denial of deduction claimed by the Assessee for the sales made against ST-1 Forms. - Decided in favor of assessee. - ST.APPL. 25/2013 - - - Dated:- 28-8-2015 - Dr. S. Muralidhar and Mr. Vibhu Bakhru, JJ. For the Petitioner : Mr. Rajesh Mahna with Mr. Ramanand Roy, Advocates. For the Respondent : Mr. Peeyoosh Kalra, Additional Standing Counsel with Mr. G. Jain, Advocate. Judgment Vibhu Bakhru, J 1. This is an appeal preferred by the Assessee under Section 81 of the Delhi Value Added Tax Act, 2004 (hereafter DVAT Act ) impugning a common order dated 19th March, 2013 passed by the Appellate Tribunal, Value Added Tax, Delhi (hereafter the Tribunal ) in Appeal Nos. 877- 878/ATVAT/09-10 emanating from proceedings relating to the assessment year 1983-84. This Court admitted the present appeal on 1st November, 2013 and framed the following questions of law for consideration:- Whether the order of the Appellate Tribunal, Value Added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts as well as the photocopies of the ledger accounts pertaining to the purchasing dealers. The Assessee claimed that the sales had been made in good faith to purchasing dealers who were duly registered with the concerned department and thus, the Assessee could not be held responsible for any discrepancy or any delinquency on the part of the purchasing dealers. 3.3 The AA passed an Assessment Order dated 18th March, 1988 rejecting the Assessee s contention. The AA held that the Assessee could not substantiate its claim with reference to the movement of goods and concluded that the sales had, in fact, been made to unregistered dealer(s)/customer(s) and the declarations in ST-1 Forms had been arranged from the purchasing dealers in collusion. 3.4 The Assessee preferred an appeal before the Deputy Commissioner (Appeals) vide Appeal No.185/88-89. The Deputy Commissioner (Appeals) disposed of the appeals by an order dated 31st March, 1989 and remanded the matter back to the AA. The Appellate Order dated 31st March, 1989 is not on record, however, the assessment order framed subsequently indicates that the matter was remanded back with the direction to re-examine the ST- 1 For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. A/5 281532 M/s M.M. Industries Rs.1,85,355/- Rs.28,552.00/- Popular Inds. Total Sales as per ST-1 Form/(Disallo wances) :- Rs.13,40,735/- 3.6 The Assessee appealed against the remand assessment order before the First Appellate Authority (hereafter FAA ), which was rejected by an order dated 24th September, 2004; the FAA holding that the Assessee had failed to prove the genuineness of the sales in question and upheld the remand assessment order. 3.7 Being dissatisfied with the order dated 24th September, 2004 of the FAA, the Assessee sought a review of the said order by filing a review petition. The Assessee contended that it had placed the deposit slips, bank statements, ledger accounts and duly receipted invoices on record to show the genuineness of the sales transactions in question. It was once again contended that the Assessee could not be held responsible for the misuse of the statutory declarations (ST-1 Forms) by the purchasing dealers. However, the petitioner s contentions were not acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val contentions, it would be relevant to refer to the relevant provisions of the Delhi Sales Tax Act, 1975 as were enforced at the material time. 7. Section 4 of Act provides for the levy of Sales Tax on the taxable turnover of an assessee. The expression turnover is defined under Section 2(o) of the Act as under:- (o) turnover means the aggregate of the amounts of sale price receivable, or, if a dealer so elects, actually received by the dealer, in respect of any sale of goods, made during prescribed period in any year after deducting the amount of sale price, if any, refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period: Provided that an election as aforesaid once made shall not be altered except with the permission of the Commissioner and on such terms and conditions as he may think fit to impose. 8. Sub-section (2) of Section 4 of the Act provides for certain deductions from the dealer s turnover to arrive at the taxable turnover for the purposes of the Act. Section 4(2)(a)(v) of the Act provides for exclusion of certain sales made by a registered dealer to another registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to which a dealer may claim deduction from his turnover on account of sales to registered dealers.-(1) A dealer who wishes to deduct from his turnover the amount in respect of sales on the ground that he is entitled to make such deduction under the provisions of subclause (v) of clause (a) of sub-section (2) of section 4, shall produce- (a) copies of the relevant cash memos or bills according at the sales are cash sales or sales on credit; and (b) a declaration in Form ST-1 duly filled in and signed by the purchasing dealer or a person authorized by him in writing: Provided that no single declaration in Form ST-1 shall cover more than one transaction of sale except in cases where the total amount of sales made in a year covered by one declaration is equal to or less than ₹ 50,00,000/- or such other amount as the Commissioner may, from time to time, specify in this behalf in the Official Gazette: Provided further that where, in the case of any transaction of sales, the delivery of goods is spread over different years it shall be necessary to furnish a separate declaration in respect of goods as delivered in each year. 10. Rule 8 of the Rules ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied that the declaration forms have not been used bona fide by the applicant or that he does not require such forms bona fide, the appropriate assessing authority may reject the application or it may issue such lesser number of forms as it may consider necessary. (b) If the applicant for declaration forms has, at the time of making the application, failed to comply with an order demanding security from him under sub-section (1) of section 18, the appropriate assessing authority shall reject the application. (c) If applicant for declaration forms has, at the time of making application (i) defaulted in furnishing any return or returns in accordance with the provisions of the Act or these rules, or in payment of tax due according to such return or returns; or (ii) defaulted in making the payment of the amount of tax assessed or penalty imposed by assessing authority, in respect of which no orders for instalments/stay have been obtained from the competent authority under the provisions of law; or (iia) not filed proper Requisition Account of the declaration forms required by him; or (iib) not filed proper utilization account in Form ST-2B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied primarily from the seller, the burden is ultimately passed on to the consumers of goods because it enters into the price paid by them. Parliament with a view to reduce the burden on the consumer arising out of multiple taxation has, provided in respect of sales of declared goods which have special importance in inter-State trade or commerce, and other classes of goods which are purchased at an intermediate stage in the stream of trade or commerce, prescribed low rates of taxation, when transactions take place in the course of inter-State trade or commerce. Indisputably the seller can have in these transactions no control over the purchaser. He has to rely upon the representations made to him. He must satisfy himself that the purchaser is a registered dealer, and the goods purchased are specified in his certificate: but his duty extends no further. If he is satisfied on these two matters, on a representation made to him in the manner prescribed by the Rules and the representation is recorded in the certificate in Form 'C' the selling dealer is under no further obligation to see to the application of the goods for the purpose for which it was represented that the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chasing dealers, the bank statement evidencing receipt of consideration for sales made by bank drafts and cheques, ledger accounts of the purchasing dealers, which also indicate the receipt of consideration from the respective purchasing dealers and duly receipted invoices. The Order dated 3rd February, 2010 dismissing the Review Petition filed by the Assessee indicates that the aforesaid documents were referred to by the Assessee. 17. The AA had passed the remand assessment order concluding that the sales were not genuine, principally, for the reason that the Assessee had been unable to produce the purchasing dealers and according to the AA, it had also not established the transfer of property in goods. 18. In our view, the aforesaid reasons would not be sustainable in light of the fact that the Assessee had produced documents for the sale of goods and the duly receipted invoices along with original ST-1 Forms coupled with receipt of consideration through bank drafts and cheques that would clearly establish the transactions claimed by the Assessee. The AA was unduly influenced by the ST-2 Account filed by the purchasing dealer and the fact that the purchasing dealers were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 323.00 - had been received after the date of invoice. The Tribunal assumed that it was the trade practice to sell goods on credit and, thus, receiving advances against the sales indicated that the transactions were not genuine and were contrary to the trade practice. We are hard pressed to find any material on record, which would indicate that it was the established trade practice in the copper wire industry to sell goods on credit. Concededly, there was no material before the Tribunal, which would support this view. In the circumstances, the decision of the Tribunal, which is based on such an assumption would be wholly perverse and bereft of merits. 20. The Tribunal had further concluded that the transfer of property in goods had not been established. We find the aforesaid conclusion to be unmerited in view of the fact that the Assessee had produced invoices which were duly receipted by the purchasing dealers. The ST-1 Forms, in addition to the other particulars, also specifically recorded the receipt of goods by the purchasing dealer. In addition, the receipt of consideration for the sale of goods had been established by showing (a) deposit slips in certain cases; the bank st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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