TMI Blog2019 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly and in accordance with law after taking into consideration relevant documents and all attendant circumstances. Penalty - Held that:- The turnover relating to consignment sales is reflected in the books of accounts of the appellant and the appellant has claimed exemption in respect thereof in monthly returns. It is urged that because the Assessing Officer takes a different stand in the assessment order to reverse the claim that cannot be a valid ground to impose penalty under Section 12(3)(b) of the TNGST Act. This submission will have to be taken into account by the Assessing Officer. It appears that this submission was made before the Tribunal but it did not receive proper attention from the Tribunal. It needs to be independently considered. The Assessing Officer is directed to consider the individual transactions of the appellant with Bhuwalka Trade Links (P) Limited afresh independently and in accordance with law - matter on remand. - CST/5–6/2014 - - - Dated:- 20-12-2018 - Mrs. Justice Ranjana P. Desai, Chairperson For the Appellant(s) : Mr. P. Rajkumar For the Respondent(s) : Mr. K.V. Vijayakumar, Advocate for State of Tamil Nadu, Mr. K.V. Ram Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-. The reason for revision, inter alia, was that the inspection conducted on 22.12.1997 disclosed that the goods were consigned to other States against pre-existing orders from ultimate buyers and the agents sold the goods received from the assessee / principal immediately after landing, thereby acting as conduits. By the revision order dated 30.06.1999, the Assessing Officer has assessed the turnover of ₹ 64,99,961/- with tax @ 8% and penalty under Section 9(2A) of the CST Act read with Section 16(2) of the TNGST Act. Against the original order dated 25.05.2001 for the year 1995-96 and revision order dated 30.06.1999 for the year 1996-97 the appellant preferred appeals before the Appellate Assistant Commissioner (CT), respondent no. 3 herein. Respondent no. 3 allowed the appeals in favour of the appellant holding that there was no clinching evidence to prove that the goods were moved to other States only on prior contract so as to treat the transactions as inter-state sales. Respondent no. 3 held that the conclusion of the Assessing Authority was based on mere surmises and guess and is not supported by any material on record. Respondent No. 3 set aside the tax and pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the relevant documents to be furnished by the appellant with respect to Bhuwalka Trade Links (P) Limited for both years. STA 243/03 which relates to 1995-96 is partly dismissed and partly allowed so far as tax liability is concerned. STA 56/04 which relates to 1996-97 is remanded. So far as penalty is concerned the Tribunal has observed that some of the transactions where goods were sent straightaway to the sister concern of the agent at Bangalore were also claimed as consignment sales in returns and books of accounts. There was therefore intention to evade tax and suppression of facts. In such cases penalty under Section 12 (3) (b) or 16(2) as the case may be is warranted. On the consignments relating to the agent Bhuwalka Trade Links (P) Limited which are otherwise found genuine, penalty cannot be levied. The Tribunal in the circumstances set aside the penalty levied on transactions for which deduction was allowed by respondent no. 3 and which was confirmed by it. Thus so far as penalty is concerned STA 243/03 (1995-96) is partly dismissed and remanded and STA 56/04 (1996-97) is remanded. Mr. Rajkumar, Learned Counsel for the appellant has assailed the impugned order on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos. 548 549 of 85. So far as penalty is concerned, Counsel submitted that merely because the appellant has claimed exemption on the turnover relating to consignment sales and the same is disallowed that cannot be a valid and legal ground to impose penalty under Section 12(3)(b) of the TNGST Act in the absence of a best judgment of assessment under Section 12(2) of the TNGST Act. For imposing penalty under Section 12(3)(b) of the TNGST Act, the assessment should be a best judgment assessment under Section 12(2) of the TNGST Act. But in this case the turnover relating to consignment sales is available in the books of accounts of the appellant and the appellant has also claimed exemption in respect thereof in monthly returns. The Assessing Officer has after verifying the books of accounts and the returns filed by the appellant allowed the appellant s claim in the original assessment order. Merely because the Assessing Officer is taking a different stand in the assessment order to reverse the claim, that cannot be a valid ground to impose penalty under Section 12(3)(b) of the TNGST Act. Several judgments have been cited on this point. Suffice it to refer to the judgment of the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned remand order does not cover the entire claim for deduction made by the appellant towards consignment sales. It covers limited area. For the year 1995-96, the appellant returned total and taxable turnover of ₹ 2,94,04,692/- and ₹ 20,66,389/- respectively under the CST Act. In the year 1996-97, the appellant returned total and taxable turnover of ₹ 99,20,097/- and ₹ 30,228/- respectively under the CST Act. After inspecting the business premises of the appellant and after following the procedure in light of the material disclosed in the inspection, the Assessing Officer rejected the exemption claimed on consignment sales for ₹ 2,64,14,974/- and treated those transactions as direct inter-state sales for the year 1995-96. For the assessment year 1996-97, the Assessing Officer allowed deduction on consignment sales for ₹ 64,99,961/- but on inspection of the business premises of the appellant, the Assessing Officer revised the assessment in light of material disclosed in the inspection after following due procedure. He rejected the exemption claimed on consignment sales for ₹ 64,99,961/-. Against these orders the appellant preferred appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for both the years i.e. 1995-96 and 1996-97. The Tribunal has remanded the matter to the Assessing Officer only to the extent of the claim of deduction on consignment sales made by the appellant qua transactions with Bhuwalka Trade Links (P) Limited. Now the question is whether this remand order deserves to be disturbed. What has weighed with the Tribunal is the fact that in some of the transactions goods were sent straight to the appellant s sister concern i.e. Bhuwalka Steel Industries yet claim of stock transfer was made. The Tribunal, therefore, was of the view that there was intention to evade tax and there was suppression of facts. It was argued by. Counsel for the appellant that there are a series of judgments of this Authority and of various Tribunals and also of the Supreme Court which state that merely because the goods were sold on the same date of arrival or two or three days after receipt of the goods at branch office one cannot conclude that there was inter-state sale and no branch transfer. There can be no debate over this proposition. A solitary circumstance may not in a given fact situation lead to a conclusion that there was no stock transfer. But if ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misrepresentation that it sent a notice of revision. Therefore no fault could be found with the revision of assessment proceeding. However, taking an overall view of the matter I feel that the Tribunal while remanding the matter to the Assessing Officer should have left the Assessing Officer free to come to his conclusion after taking into consideration all the relevant circumstances independently and in accordance with law. Pertinently, the Tribunal has directed the Assessing Officer to decide the issue after considering relevant documents to be furnished by the appellant with respect to Bhuwalka Trade Links(P) Limited for both years. Therefore, in all fairness, after remand the matter needs to be examined independently and in accordance with law. It is, therefore, necessary to give a direction to the Assessing Officer to carry out the exercise independently and in accordance with law after taking into consideration relevant documents and all attendant circumstances. So far as penalty is concerned, the Tribunal has bifurcated the order of penalty imposed by the Assessing Officer. It is observed that penalty would be warranted for those transactions which have been claimed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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