TMI Blog2017 (9) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings could not be disturbed under Section 16 of the Act. When the original assessment rested on the findings of enquiry with reference to the details in Form F and the finding on Form F thus remained undisturbed even in the reassessment proceedings, the reassessment order revoking the exemption granted under Section 6A of the Central Sales Tax Act could not sustained. Penalty - Held that: - It is a settled legal position that if the turnover is culled out from the books of accounts of the dealer and the conduct of the dealer is not contumacious or there is any mala fides with intent to evade payment of tax, the said provision would not stand attracted. Therefore, in the event, the second respondent proposes to rake up the issue relating to penalty, the petitioner is entitled to raise objections and the second respondent shall take note of the legal principles laid down in a catena of cases as to under what circumstances penalty is leviable. The second respondent is directed to furnish the copies of the seized documents, which have been marked as book D and E within a reasonable time on costs being remitted by the petitioner for making out such copies - the second respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of inspection, the Inspecting Officers recovered 5 sale invoices pertaining to Pondicherry Depot and such invoices revealed sales to Tamil Nadu customers from Pondicherry Depot. Further commenting upon the nature of the transaction, it was observed that it is unbelievable because no consumer will visit the place far away from his place to purchase the product from Pondicherry Depot. On verification of certain Pondicherry invoices, wherein, the petitioner's Coimbatore head office-manufacture themselves had mentioned the name of either the authorized dealer or name of the canvassing agent on the right side edge of the invoices. These records were recovered from the petitioner. 5. After cataloging the records, the second respondent stated that even though they could not correlate each and every movement transported from manufacturing unit to Pondicherry Depot and Pondicherry branch to actual consumer in Tamil Nadu, the goods manufactured and sent to Pondicherry Depot are not sold to the actual consumers in Tamil Nadu, but again transported to Tamil Nadu to the destination contracted by the Coimbatore manufacturing Unit and terminates as a whole in the same State, but p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the same are checked and then allowed to proceed further. On arrival at Pondicherry, the goods are off-loaded and kept in Company's Godown/Warehouse. The Depot is maintaining huge stocks at all times and the orders placed on Pondicherry Depot for supplies to a particular customer in Tamil Nadu are executed from Pondicherry Depot only. The appropriation of goods take place at Pondicherry Depot only and the goods as per orders are dispatched to the particular customer through road transport for which an invoice is prepared and applicable sales tax is charged therein. 8. Therefore, it was contended that after appropriation of goods, the actual movement of goods commenced from Pondicherry Depot to execute the purchase orders from the customer, which are placed on Pondicherry Depot and not from the manufacturing unit in Tamil Nadu, as alleged in the pre-assessment Notice. Further, the petitioner pointed out that the second respondent in the show cause notice has referred to Explanation 2 to Section 3 of the CST Act and the said Explanation covers only cases where movement of goods commences and terminates in the same State, but due to territorial locations, the vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh was concerned, separate order setting aside the assessment order was passed by this Court in W.P.No.10262 of 2005. Therefore, this Court has to look at the finding rendered by the second respondent on the issue relating to the stock transfer to the Pondicherry Depot, which has been treated as a local sale (i.e.) a sale within the State of Tamil Nadu. I find that the finding is very sketchy and that the second respondent has not dealt with the major issues, which the petitioner has pointed out. 13. Two of the major issues, which the second respondent should have decided is with regard to validity of Form F declarations produced by the petitioner. The second aspect on which the respondents should have rendered a finding is with regard to specific contention of the petitioner regarding appropriation of goods. The petitioner contended that after appropriation, the actual movement of goods were made/commenced from Pondicherry Depot. Unfortunately in the impugned order, the second respondent has not rendered a finding on these two issues and unless and until a finding is being rendered, the question of treating the transaction as local sale would not arise at this juncture. 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y manner, disturbed the acceptance of Form F. Once a declaration had been accepted and acted upon by the Revenue, unless and until on further enquiry made thereto the particulars furnished were found to be incorrect or untrue, the assessment once made based on Form F, could not be reopened. Unless the details were found to be writ with fraud, collusion or misrepresentation or suppression of material facts, on a mere change of opinion, the findings could not be disturbed under Section 16 of the Act. When the original assessment rested on the findings of enquiry with reference to the details in Form F and the finding on Form F thus remained undisturbed even in the reassessment proceedings, the reassessment order revoking the exemption granted under Section 6A of the Central Sales Tax Act could not sustained. 17. The above decisions are referred to indicate as to what would be the scope of enquiry on such Form F declaration. With regard to appropriation aspect, the second respondent should take note of the decision of the Hon'ble Supreme Court in case of TATA Engineering and Locomotive Co. Limited v. Assistant Commissioner of Commercial Taxes reported in [1970] 26 STC (354), wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preceding paragraphs on the legal principles set out on the issues. 20. In the impugned order, the second respondent has also confirmed the proposal to levy penalty under Section 12(3)(b) of the TNGST Act. It is a settled legal position that if the turnover is culled out from the books of accounts of the dealer and the conduct of the dealer is not contumacious or there is any mala fides with intent to evade payment of tax, the said provision would not stand attracted. Therefore, in the event, the second respondent proposes to rake up the issue relating to penalty, the petitioner is entitled to raise objections and the second respondent shall take note of the legal principles laid down in a catena of cases as to under what circumstances penalty is levyable. 21. This is so because in the impugned assessment order the second respondent refers to the records and the returns filed by the petitioner and that the petitioner is stated to have furnished higher figures and while submitting their objections, they have pointed out that the stock transfer amount has been taken as ₹ 10,20,89,252/- whereas the correct figure is ₹ 11,33,00,500/-. This would show that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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