TMI Blog2018 (8) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... asioned otherwise than as a result of Sale i.e. as Stock Transfer which was not liable to be taxed - The submission of Form-F by itself does not raise any un-rebutable or conclusive presumption regarding the transaction(s) being Stock Transfers - In the present case Form-F was not accepted by the Assessing Authority while exercising his power under Section 6-A(2), albeit at the time of assessment. In the case at hand after the matter was remanded back by the order of the Tribunal dated 26.09.2005, a show cause notice was sent to the Revisionist asking it to appear along with the original records, account books, the details of Stock Transfer to Jaipur and to get the same verified from the said account books but inspite of this notice the Revisionist did not produce the said records. All that was produced was a copy of the statement of accounts sent by the Clearing and Forwarding Agent from Jaipur. Each individual transaction of Stock Transfer was required to be verified and this could be done only from the relevant record requisitioned by the Assessing Authority and not otherwise. No reason cogent reason was put-forth by Sri Sachdeva for the non-production of records except to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, Stock Transfer can be considered Inter-State Sale, without any cogent reason ? iv. Whether, on the facts and in the circumstances of the case, the Animal Health Products/Cattle Feed are covered by Notification No.ST-2-7036/10-7( ) 23-83 dated 31.-1.1985 ? The Revisionist is a manufacturer of ''Ghee' which had its factory at Aligarh and according to it, it transferred a Stock of Ghee to the tune of ₹ 1,48,71,415.86 from Aligarh to its ''Clearing and Forwarding Agents' at Jaipur in Rajasthan involving various transactions which is in dispute and has been treated as Inter-State sale. Form-F referred in Section 6-A(2) of the Central Sales Tax Act, 1956 (hereinafter referred to as ''the Act, 1956') read with Rule 12(4) of the Central Sales-tax (Registration and Turnover) Rules, 1957 (hereinafter referred to as ''the Rules, 1957'), as issued by the Principal Officer at Jaipur, was submitted before the Assessing Authority in the State of U.P. allegedly in term of Section 6-A of the Act, 1956 read with the corresponding Rules, 1957. However, the Assessing Authority did not accept the particulars mentioned in Form-F, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997) UPTC 1187 SC. It is not out of place to mention that this decision has been over ruled by the Supreme Court in the subsequent decision of Ashok Leyland vs. State of Tamil Nadu reported in (2004) 3 SCC 1(hereinafter referred to IInd Ashol Leyland case), wherein it has been held that an order accepting Form-F under Section 6-A of the Act, 1956, raises an irrebuttable and conclusive presumption as to the transaction being a stock transfer and not a sale but more of it later. Be that as it may, against the said order a second appeal was filed by the Revisionist before the Tribunal which was rejected on 27.09.2005. The Tribunal's order states that notices were issued to the appellant (revisionist herein) to appear along with account books and complete details regarding the Stock Transfer to Jaipur and to get the said transactions verified from the account books. In response to it the appellant (revisionist) herein submitted that Clearing and Forwarding Agents had sent a copy of the statement of Accounts of the said transactions, the Stock Transferred to Clearing and Forwarding Agent was not meant for any specific customer. The Tribunal inter-alia observed that verificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Andhra Pradesh vs. Shree Akkamamba Textiles Ltd. reported in (2014) 43 GST 627 (A.P), State of Tamil Nadu vs. Parry Agro Industries Ltd. anr. reported in (2011) 42 VST 362 (Mad.) and Eternit Everest Ltd. Vs. State of Tamil Nadu reported in Manu/TN/3431/2017 (Mad.), North Star India Pvt. Ltd. Vs. Commissioner Trade Tax reported in (2009) 25 VST 378 (Alld) in support of his contentions. It was also his contention that the goods had not been sent to any specific third party but had been sent to the Clearing and Forwarding Agent and there was no proof of it being a sale. Sri Karan Sachdeva did not advance any other argument. Sri Rohit Nandan Shukla, learned Additional Chief Standing Counsel relied upon the decision of the Division Bench of Karnataka High Court rendered in the case of Harison and Company vs. The Additional Commissioner reported in 2006 146 STC 609 Kar and a judgment of Division Bench of Kerla High Court in the case of CPK Trading Company vs. Additional Sales Tax Officer and another Writ Appeal No. 498 of 1983 decided on 07.06.1989 to contend that the Assessing Authority was well within his jurisdiction to have requisitioned the account books and other records f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the particulars contained in the declaration furnished by a dealer under sub-section(1) are true, he may, at the time of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to the effect and thereupon the movement of goods to which the declaration relates shall be deemed for the purposes of this Act to have been occasioned otherwise than as a result of sale. Explanation.- In this section, assessing authority in relation to a dealer, means the authority for the time being competent to assess the tax payable by the dealer under this Act. Under Section 6 of the Act, 1956 an Inter-State sale is exigible to tax. Whether or not a transaction is a Sale is normally to be proved by the Assessing/Revenue Authority, however, by insertion of Section 6-A in the Act, 1956 this legal position was changed and the burden of proof in this regard was saddled on the dealer. The said provision as it existed prior to its amendment by the Act No.20 of 2002 gave an option to the dealer to furnish Form-F declaring the transaction to be Stock transfer and if the Assessing Authority, after making such inquiry as he deemed necessary, was satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case, firstly; for the reason, the submission of Form-F by itself does not raise any un-rebutable or conclusive presumption regarding the transaction(s) being Stock Transfers. The judgment of the Supreme Court in the case of IInd Ashok Leyland case does not lay down any such proposition. What it says is that once an order accepting Form-F has been passed under Section 6-A(2) then the veracity of the transaction and validity of the said order cannot be questioned subsequently by reopening the case on this ground. Thus, the ratio of the judgment is that the order accepting Form-F is final and binding and not that mere submission of Form-F is conclusive proof of Stock Transfer or that the transaction was not a sale. In the present case Form-F was not accepted by the Assessing Authority while exercising his power under Section 6-A(2), albeit at the time of assessment, therefore, the principle of law laid down in IInd Ashok Leyland case (supra) as referred hereinabove does not apply. Now so far as reliance placed by Sri Sachdeva upon paragraphs 51 to 55 and 101 to 104 of the said judgment is concerned, in the first Ashok Leyland case the opinion expressed was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitioned by the Assessing Authority and not otherwise. In this context we must keep in mind that the case at hand pertains to the year 1991-92 i.e. prior to the coming into force of the amendment in the year 2002, therefore, during the said period the dealer had an option to establish that the transaction was Stock Transfer either by submitting form-F subject to its scrutiny by the Assessing Authority or by other means such as furnishing of documents of Account. The Assessing Authority as is evident from the provision contained in sub section 2 of Section 6-A of the Act, 1956 as existing at that time, was required to satisfy himself as to whether the particulars contained in the declaration furnished by a dealer under sub section (1) are true. This satisfaction was to be arrived at after making such inquiry as he may deem necessary. Now the inquiry obviously was with regard to the particulars contained in Form-F and the particulars would be regarding the transaction of Stock/goods claimed otherwise than by way of sale. In this context of verification of the particulars for the purposes of arriving at a satisfaction in terms of sub section 2 of Section 6-A, the Assessing Authority w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts out that in cases where the dealer exercises the option of furnishing the declaration (F forms), the only further requirement is that the assessing authority should be satisfied, after making such enquiry, as he may deem necessary, that the particulars contained in the declaration furnished by the dealer are true . The scope or frontiers of enquiry, by the assessing authority under Section 6A(2) of the central Sales Tax Act is limited to this extent, namely, to verify whether the particulars contained in the declaration (F forms) furnished by the dealer are true . It means, the assessing authority can conduct an enquiry to find out whether the particulars in the declaration furnished are correct, or dependable, or in accord with facts or accurate or genuine. That alone is the scope of the enquiry contemplated by Section 6A(2) of the Act. On the conclusion of such an enquiry, he should record a definite finding, one way or the other. As to what should be the nature of the enquiry, that can be conducted by the assessing authority under Section 6A(2) of the Act, is certainly for him to decide. It is his duty to verify and satisfy himself that the particulars contained in the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revisionist for non-production of the account books and other records as requisitioned by the Assessing Authority. Though, the scope of inquiry under Section 6-A(2) is limited to the veracity of the particulars mentioned in Form-F, the nature of the inquiry could encompass the requisitioning of relevant records and the IInd Ashok Leyland case does not lay down any proposition of law to the contrary. It has to be kept in mind that under Section 6-A the burden is upon the dealer to prove that it is a Stock Transfer and if he submits Form-F the burden is upon him to prove the particulars mentioned therein and satisfy the Assessing Authority as to their truthfulness and in this process if the Assessing Authority demands certain records the dealer is bound to produce it to facilitate the inquiry referred in sub section (2) and a satisfaction being arrived at by the assessing authority as envisaged in the said provision. If it does not, then the Assessing Authority is within his jurisdiction to reject form-F. Similar view has also been expressed by a Division Bench of Karnataka High court in the case of Harison and Co. (supra) wherein the IInd Ashok Leyland case has been considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative evidence such as correspondence, delivery challans, etc. Submission of F form declarations is not conclusive evidence that the movement of goods is a branch transfer/stock transfer and not a sale. The sales tax authorities can investigate and make enquiries whether the declaration is genuine and true and reject the 'F' forms, if the transaction is found to be not genuine. Section 6-A of the CST Act lays down a particular mode of proof and it is implied that the production of such proof will dispense with the necessity of adducing any other or further evidence and will suffice for the grant of the benefit. But Section 6-A(2) of the CST Act goes a little further and provides for the possibility of an enquiry being conducted by the assessing authority. It is open to the assessing authority to make further enquiry to satisfy himself that the particulars contained in form 'F' declarations are true. It is only then that the assessing authority is enjoined to pass an order in the matter. An order passed under Section 6-A(2) of the CST Act is nothing but a step in aid or process, which leads only to the ultimate computation of assessment of tax liability. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfers. Inspite of issuing several notices, the assessee had failed to produce any documentary evidence to show that there has been branch transfer of goods and no inerstate sales were effected during the assessment period in question. As we have already noticed, the burden is on the assesseee to prove that the transaction is not a sale but a branch transfer or a consignment sale, but though several opportunities were provided to the assessee to discharge its burden as prescribed under Section 6-A of the CST Act, it has failed to do so, and therefore, the assessing authority had no other option but to reject the form ''F' declarations filed by the assessee. It is also relevant to quote paragraphs 108, 109 and 110 of the IInd Ashok Leland (supra) Case in this context, which are as follows:- 108. In Sahney Steel (supra) whereupon reliance has placed by the assessing authority, a contention was raised that the registered office and the branch office were separately registered as dealers under the sales tax law and transaction effected by the branch office should not be identified with transactions effected by the registered office. Pathak, J., as the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant records as referred earlier. The Revisionist not having produced the records inspite of notice, it failed to discharge the burden under Section 6-A(2), therefore, the assessing and appellate authorities correctly treated the transaction as deemed Inter State Sale. The Division Bench judgments quoted above relate to a period prior to 2002 as is the case at hand. To contend as Sri Sachdeva did that no cogent reasons have been given for treating the transaction as sale is misconceived, as, the burden of proof, as stated above, was upon the Revisionst dealer which failed to discharge it, therefore, the the transactions have rightly been deemed as Inter-State sale under Section 6A-2 of the Act, 1956. As regards the judgments relied by the learned counsel for the Revisionist one of which i.e. IInd Ashok Leyland case (supra) has already been dealt with hereinabove. As far as the case of Seagram Manufacturing Pvt. Ltd. (supra) is concerned in the said case an order accepting Form-F had been passed which is not the case here. In Shree Akkamamba Textiles Ltd., (supra) also the assessing authority had allowed the exemption, therefore, his order was conclusive proof that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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