TMI Blog2021 (4) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of stocks held with the agents in their accounts. The first appellate authority noted that though these were the observations and directions given by the appellate Deputy Commissioner, while remanding the matter to the Assessing Officer with direction to verify the Form-F declaration, the Assessing Officer failed to carry out the directions issued. After making such an observation, the first appellate authority proceeds to examine the transaction. The first appellate authority concluded that the finding of the Assessing Officer that the goods moved pursuant to an order passed by the broker has not been factually established, the first appellate authority relied on the decision in the case of STATE OF ORISSA VERSUS ROLTA MOTORS LTD. [ 1992 (1) TMI 319 - ORISSA HIGH COURT] - the first appellate authority once again took note of the finding recorded by the appellate Deputy commissioner in the earlier round, where a specific finding has been given regarding the role of the broker and such finding was endorsed by the first appellate authority in its order dated 15.10.1999. Furthermore, we find that the State did not challenge the order passed by the appellate Deputy commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Rules, 1959. 4.The petitioner's case is that they are in the practice of effecting transfer of goods on consignment basis to their agents situated in other States as provided under Section 6-A of the CST Act and such stock transfer or branch transfer or on consignment basis has been exempted under the CST Act. The petitioner had appointed consignment agents in Bombay and Calcutta and goods were transferred on consignment sale basis to those agents. The Assessing Authority by proceedings dated 31.05.1990, allowed exemption on the said turnover, but subsequently based on the inspection conducted by the Enforcement Wing Officials, in the place of business of the petitioner on 05.03.1993, revised the assessment disallowing the claim of exemption originally granted by order dated 05.11.1996. 5.Aggrieved by such order, the petitioner preferred appeal before the Deputy Commissioner (Appeals) (CT) and the appeal was allowed and the matter was remanded to the Assessing Officer with direction to consider the claim for exemption on the ground that the sales were consignment sales. The petitioner, in support of their claim for exemption, had furnished Form- F declaration as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order passed by the Tribunal. 8.Mr.Mohammed Shaffiq, learned Special Government Pleader while seeking to sustain the order passed by the Tribunal, submitted that during the inspection, it was found that the disputed turnover was outright inter- State sales, as the goods were dispatched based on specific orders placed by the brokers on behalf of the other State brokers. Further, the Tribunal noted that the place of business of the broker at Coimbatore was inspected by the Enforcement Wing Officials on 05.03.1993 and from the records and evidence gathered in the inspection made, the Assessing Authority has identified dispatches for the years 1988-89 to 1990-91 as made to other State dealers based on orders of the brokers specifying exact quantity of yarn, the specific rate and amounts involved, the transporter and the petitioner have dispatched the goods in direct relation to those orders and concluded the relevant dispatches as outright inter-State sales and levied tax. 9.Further, the Tribunal has referred to the statement given by the brokers. After taking note of the records, the Tribunal held that the argument of the petitioner that the brokers mainly acted as liais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyer wrote to the Bombay branch of the appellant therein asking for lowest quotation of the goods. The Bombay branch wrote to the Madras branch giving all the specifications and stating that the goods were for the Bombay buyer. The Madras branch, in reply, referred to the order of the Bombay buyer, gave the required particulars and mentioned that the price was f.o.r. Madras. The Bombay branch, thereafter, wrote to the Bombay buyer re-producing all the particulars, conditions of sale and mode of despatch as stated by the Madras branch and further, stated that the goods would be manufactured at the Madras branch factory. The Bombay buyer placed an order with the Bombay branch accepting all the terms and conditions. The Bombay branch placed an indent order addressed to Madras branch giving all the particulars, the buyer's name, order number and date. On receipt of an invoice from the Madras branch, the Bombay branch wrote to the Bombay buyer that some of the goods, against the order, were ready for despatch and asked for details of despatch instructions. The Bombay branch, thereafter, wrote to the Madras branch giving the despatch instructions and stating that the railway receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roken, the transaction cannot be regarded as an inter-State sale. 17.In Ashok Leyland Ltd. (supra), the question involved was the interpretation of Section 6-A of the CST Act and the Hon'ble Supreme Court considered the issue as to whether re-assessment can be done on a dealer after the dealer has furnished declaration in Form-F and the assessment stood completed. It was held that by reason of sub-Section (2) of Section 6-A of the CST Act, a legal fiction has been created for the purpose of the CST Act to the effect that the transaction has occasioned otherwise than as a result of sale. On an analysis of the provisions of the CST Act, the Hon'ble Supreme Court held that the following propositions of law emerge:- (i) The initial burden of proof is on the dealer to show that the movement has occasioned by reason of transfer of such goods which is otherwise than by reason of sale. The assessee may file a declaration. On a declaration so filed, an inquiry is to be made by the assessing authority for the purpose of passing an order on arriving at a satisfaction that movement of goods has occasioned otherwise than as a result of sale. (ii) Whenever such an order is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside the same to the extent indicated and remanded the matter back to the Assessing Authority for a proper consideration and for correct levy of penalty. 23.We have carefully gone through the order passed by the first appellate authority. As mentioned earlier, the revision of assessment was pursuant to an order of assessment passed by the Appellate Deputy Commissioner. The first appellate authority, in its order dated 15.10.1999, in paragraph 7 therein, has noted the direction issued by the Appellate Deputy Commissioner in the earlier round of litigation. The appellate Deputy Commissioner directed the Assessing Officer to verify the Form-F declaration filed and make fresh assessment, according to the provisions of the CST Act and not stopping with that, certain findings were recorded with regard to the nature of the agent. It was pointed out that the broker is a professional carrier acts as a conduit for the principal and agent and it is common in all lines of trade that the broker in certain cases obtained the payment from their agents and they are not transmitted to the principal and this will in no way alter the characteristics of the consignment sale. Further, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the availability and the labour statement, which was filed by the petitioner was examined to consider the correctness of the submission and the first appellate authority has recorded that there were variations in dispatch of the goods as well as in realization of the value of the goods. Illustratively, the first appellate authority took up for consideration one of the transactions, which was done in the month of May, 1998. In respect of the same, the broker indicated to send 70 bales of different varieties, but no dispatches were made during the said month. In June, 1998 there was no intimation received from the broker, but the petitioner has dispatched 50 bales and the first appellate authority also noted such type of varying transactions for different months. Further, the first appellate authority noted that the rate advised by the broker is ₹ 370/- whereas, the proforma invoice rate has been mentioned as ₹ 389.00/365.00/306.00, but the actual realisation for the dispatch is at the rate of ₹ 322.00/356.00/294.00. The details given for the entire year and for each of the consignment agents were examined by the first appellate authority and on appreciation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property of the petitioner/principal. The elaborate statements, documents, etc., which were filed before the first appellate authority, were considered and it was held that the petitioner has established beyond doubt that the goods moved pursuant to a contract, which was not only verified by the first appellate authority, but copies were furnished to the Department representative, which were also verified by the Department. 29.Thus, considering the fact situation, which prompted the first appellate authority to allow the appeal, we find that the Tribunal erroneously reversed such order by glossing over the nature of the documents, which were placed by the petitioner before the first appellate authority not only in the present round of litigation, but in the earlier round as well. That apart, the Tribunal did not advert to the findings rendered by the appellate Deputy Commissioner in the earlier round more particularly, with regard to the documentation, the nature of transaction and the role of the broker. The findings on these aspects had become final and the Assessing Officer had absolutely no jurisdiction to go beyond the finding of the appellate Deputy Commissioner in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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