2003 (11) TMI 566 - HC - VAT and Sales Tax

High Court directs fresh assessment on turnover assumptions, stresses need for concrete evidence

Tata Iron & Steel Co. Ltd. Versus Assistant Commissioner (CT), Central Assessment Circle-V, Chennai and others

Tata Iron & Steel Co. Ltd. Versus Assistant Commissioner (CT), Central Assessment Circle-V, Chennai and others - [2004] 134 STC 125 (Mad) Issues:Assessee's failure to furnish form F for iron and steel stocks received from head office, assessing officer's assumption of deliberate suppression of turnover, interpretation of Central Sales Tax Act, 1956 amendment, requirement of proof of goods movement, utilization of form F for consignor's benefit, absence of material for forms furnished to head office, validity of corrections in forms, direction for fresh assessment by assessing officer.Analysis:The judgment addresses the situation where the assessee failed to provide form F for iron and steel stocks received from its head office, leading to the assessing officer assuming deliberate suppression of turnover based on the missing forms. The Tribunal's decision was based on the assessing officer's conclusion solely due to the absence of forms, without concrete evidence of goods movement and sale. The High Court emphasized that the mere inability to produce forms does not automatically imply goods movement and sale without proper accounting.Regarding the Central Sales Tax Act, the judgment highlighted that even after an amendment, there must be substantial proof of goods movement for the assessing officer to infer a sale. The movement of goods must be established, and the inability to produce form F can only lead to deeming the movement as a sale when supported by evidence. Form F usage is clarified to benefit the consignor, indicating that movement under these forms can be recognized if they were furnished for assessment purposes to show non-interstate sales.The court noted the absence of evidence showing that the 13 missing forms were provided to the head office and furnished for assessment. Additionally, the validity of corrections in 7 forms was discussed, with the assessee justifying the corrections made after the closure of the assessment year. The court found no legal contradiction in this practice, and the Revenue's counsel agreed to examine the account books related to the corrected forms.Conclusively, the High Court set aside the Tribunal's orders and directed a fresh assessment by the assessing officer specifically concerning the turnover assumed based on the missing and corrected forms. The judgment maintains the integrity of the assessment process while emphasizing the necessity of concrete evidence to draw conclusions regarding turnover and sales transactions.