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M/s. Bikaner Woolen Mills Pvt. Ltd. Versus Assistant Commissioner, Commercial Taxes, Special Circle, Bikaner and Vica-Versa

Allowability of refund/adjustment of CST with interest - In view of the amendment in Section 9(2) of the Central Sales Tax Act, 1956 by the Finance Act, 2000 - Collected CST @ 2% on the branch transfers made of carpet yarn from Bikaner to Bhadoi - Held that:- the Revenue has failed to establish that the transactions in question of carpet yarn sent under branch transfer or S.O.S. transfers from Bikaner (Raj.) to Bhadoi (UP) units of the same assessee amounted to inter-State sales made by the Asse .....

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he Petitioner : Mr.S.D.Vyas For The Respondent : Mr.Falgun Buch on behalf of Mr.V.K.Mathur BY THE COURT (ORAL) : 1. The Assessee has filed the present two revision petitions before this Court, aggrieved by the common order dated 09.05.2003 passed by the learned Rajasthan Tax Board, Ajmer in Appeal No.268/2000 - Assistant Commissioner, Commercial Taxes, Special Circle, Bikaner Vs. M/s.Bikaner Woolen Mills Pvt. Ltd. and Appeal No.10/2000 - M/s.Bikaner Woolen Mills Pvt. Ltd. Vs. Assistant Commissio .....

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o the Bhadoi (UP) Branch, therefore, the refund/adjustment of such CST paid cannot be allowed in the hands of the Assessee at Bikaner and the interest on such tax deposited by the Assessee shall also be leviable, in view of the amendment in Section 9(2) of the Central Sales Tax Act, 1956 by the Finance Act, 2000. 4. The relevant findings of the learned Tax Board in the impugned order dated 09.05.2003 are quoted below for ready reference:- 5. Mr.S.D. Vyas, learned counsel for the petitioner- Asse .....

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reon and only the balance turnover of ₹ 10,22,048/- was shown as S.O.S. (branch transfers) in the returns filed by it. However, in the revised return filed by it, the Assessee had shown the entire turnover of ₹ 34,96,908/- supported by Form 'F' furnished by it as branch transfers and requested the assessing authority to adjust the CST wrongly paid by it on such branch transfers against the actual CST liability incurred by the Assessee on the inter-State sales made by it to th .....

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377; 49,474/-, the Deputy Commissioner (Appeals) set aside the levy of interest following the decision of the Hon'ble Supreme Court in the case of India Carbon Ltd. Vs. State of Assam, (1997) 6 SCC 479, after which the law came to be amended by amending Section 9(2) of the CST Act, 1956. 7. Therafter, the Assessee took the matter further before the learned Tax Board, where both the levy of tax as well as levy of interest came to be upheld by the learned Tax Board, while dismissing the appeal .....

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ST under the provisions of Section 3 of the CST Act, 1956, and therefore, the authorities below have erred in imposing the tax and refusing to refund/adjust the CST @ 2% wrongly deposited by the Assessee, whereas the Assessee had corrected the said mistake in the revised returns filed by it, and merely claimed adjustment of the tax against the actual CST liability on the other inter-State sales made by it to the other purchasers, other than the branch of the same Assessee at Bhadoi (UP). 10. On .....

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oi (UP). The question of interest, he submitted, would naturally depend upon the sustainability of the levy of the tax. 11. I have heard the learned counsels for the parties at length and perused the record. 12. The sine qua non for imposition of tax and interest thereon under the provisions of CST Act, 1956 is the movement of goods from one State to another, in pursuance of a pre existing contract between the parties. A contract of sale necessarily envisages existence of two parties or two diff .....

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levy and imposition of sales tax under the provisions of the State Tax Act as well as Central Sales Tax Act. 13. In the present case, the transactions prima facie appear to be mere branch transfers and not inter-State sales. The prescribed Declaration Forms alongwith documents in support of such branch transfers like Form 'F' were duly produced by the Assessee, but the same were repelled by the assessing authority, while rejecting the revised returns filed by the Assessee, merely by obs .....

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the Assessee during this period and the revised returns filed by it claiming the entire branch transfers of ₹ 34,96,908/- supported by Form 'F' were not actually branch transfers, but were inter-State sales. Neither the existence of two parties was brought on record by the Revenue, nor any such contract between such two parties was brought on record. 14. It cannot be over-emphasized and it is needless to say that the burden of proof in this regard squarely lies on the Revenue befo .....

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ity setting aside the levy of interest, other (Tax Board) restoring the same. The appellate authorities, with great respect to them, failed in discharging their obligation as the final fact finding authorities created under the provisions of the Act to apply their mind to the relevant facts and evidence on record, and rather they were swayed only by the extent of relief, which could be or could not be granted to the Assessee about the quantum of interest, forgetting that the tax itself was levie .....

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