Dealer's Burden of Proof in Interstate Sales: Form F Not Sole Evidence

The court clarified that the burden of proof lies on the dealer to establish that the transfer of goods between States was not a sale. It was held that the burden cannot be shifted to the Revenue if the dealer fails to provide evidence supporting a claim of branch transfer. The court emphasized that while form F is a common method of proof, it is not the exclusive means, and other evidence can be used to demonstrate a branch transfer. The Tribunal's decision was deemed incorrect for placing the burden on the Revenue. The case outcome favored the dealer, affirming the dealer's responsibility to prove a branch transfer using alternative evidence beyond form F.

---

---

Issues Involved:
1. Burden of proof regarding inter-State sale versus branch transfer.
2. Validity of proving branch transfer without form F.

Detailed Analysis:

Issue 1: Burden of Proof Regarding Inter-State Sale Versus Branch Transfer

The primary question was whether the Tribunal was correct in holding that the burden was on the Revenue to prove the inter-State sale even if no evidence was adduced by the assessee in support of the claim of branch transfer. The court clarified that under section 6-A of the Central Sales Tax Act, 1956, the burden of proving that the transfer of goods from one State to another was not by way of sale lies on the dealer who claims such an exemption. The court stated, "the burden is on the dealer to prove that it is a mere branch transfer or transfer from the principal to the agent, and the movement of goods from one State to another was occasioned not by reason of sale." The Tribunal's decision was found incorrect as it erroneously placed the burden of proof on the Revenue. Therefore, the answer to this question was in the negative.

Issue 2: Validity of Proving Branch Transfer Without Form F

The second question addressed whether the claim of branch transfer could be proved by other evidence in lieu of form F. The court analyzed section 6-A(1), which allows a dealer to furnish a declaration in the prescribed form along with evidence of despatch of goods to prove that the transfer was not by way of sale. The court noted that while filing form F is an easier and convenient mode of proof, it is not the exclusive method. The court stated, "there is nothing in section 6-A to persuade us to hold that filing of declaration in form F is the only mode for discharging the burden." The dealer is not estopped from proving by other relevant evidence that he is not liable to pay tax. This interpretation aligns with previous judgments, such as Commissioner of Sales Tax v. Agra Food Product Private Ltd. and Commissioner of Sales Tax v. Camphor and Allied Products, which held that the dealer could discharge the burden by other modes apart from submitting form F. Therefore, the answer to this question was in the affirmative.

Additional Observations:

During the argument, it was contended that the dealer had the required declaration in form F during the hearing before the Tribunal and that the Tribunal should have allowed the dealer the advantage thereof, possibly by a remand. The court expressed no opinion on this matter, stating that the Tribunal would need to dispose of the matters under section 24(5) in accordance with the opinion on the two questions provided.

Conclusion:

The reference was answered accordingly, affirming that the burden of proof lies on the dealer to prove a branch transfer and that such proof can be provided by means other than form F. The judgment from the Allahabad High Court in Commissioner of Sales Tax v. Agra Food Product Private Ltd. was cited to support this conclusion.

---