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TMI Blog2022 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, Bareilly Bench, Bareilly dated 10.03.2011 in Second Appeal No. 94 of 2009 for A.Y. 2004-05 (Central). By that order, the Tribunal has dismissed the appeal filed by the assessee. It has thus confirmed the order passed by the first appeal authority confirming the rejection of claim of stock transfer raised by the assessee - from its factory premises at Bareilly to its branch at Delhi. 3. The revision has been pressed on the following question of law: "Whether in face of findings recorded by the Tribunal, inference of inter-State sale from Bareilly to Delhi could have been raised though there was no clear evidence of prior contract of sale having occasioned the movement of goods from Bareilly to Delhi ?" 4. On 01.04.2003, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and isoborneol powder weighing about 7,36,535 kgs against Form F. Of that, the assessee claimed to have sold 2,08,140 kgs of those quantities to the Franchise from the assessee's branch at Delhi. The remaining quantities were sold to other persons from its branch at Delhi. 6. In the assessment order dated 27.02.2007, the assessing authority rejected the claim of stock transfer set up by the asseessee to the Franchise. The matter travelled to this Court in Commercial Tax Revision No. 1534 of 2008. It was allowed in part. The proceedings were remanded to the first appeal authority to re-hear the appeal after examining the Franchise Agreement dated 01.04.2003. Vide order dated 26.06.2009, the first appeal authority again rejected the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase -- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." 9. Thus, any sale or purchase may be deemed to be an inter-State sale, if such sale or purchase occasions the movement of goods from one State to another. The consequence of such fiction arising would be the charge of tax being created under the Central Act and rights being governed accordingly. Therefore, in each case, a critical link to be established is, whether the movement of goods from one State to another occasioned by an identifiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... internal arrangement. Then, it may have known that the goods being dispatched to Delhi would be sold to individual distributors yet, critical condition for the deeming fiction to arise remained to be satisfied. No contract of sale was visible between vis-a-vis Kelvinator and any of its distributors on the date of transfer of goods from Faridabad to Delhi. 11. Same principle applies with equal force in the present case. Though, under the Franchise Agreement quantities of camphor and camphor products were to be supplied by the assessee to the Franchise at Delhi yet, there was no firm order in existence as may have been placed on the assessee on the date of transfer of camphor and camphor products made by it from its factory at Bareilly to D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order that against Stock Transfer Memo (STM) 87 dated 06.04.2004, the assessee received 1710 pieces at its Delhi branch which were transferred to the Franchise in entirety on 07.4.2004. With respect to another transaction, it has been clearly recorded that on 12.4.2004 the assessee received 2700 pieces, of which it transferred 2100 pieces on 13.04.2004. 13. Merely because quantities of camphor may have been transferred in entirety or soon after receipt at the branch also did not create any presumption of prior contract of sale. Further, the fact that tax may not have been paid by the assessee at Delhi would remain a matter outside the jurisdictional sphere of the taxing authority in the State of U.P. Non payment of tax in one State does no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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