Accommodation invoices and bill discounting cannot be treated as taxable sales without proof of actual transfer of goods.

Accommodation invoices raised for bill discounting, without proof of actual transfer of goods, real sale, or movement of goods, were held not to constitute taxable sales under the Tamil Nadu General Sales Tax Act, 1959. The assessee relied on bank correspondence, supplier affidavits, absence of stock at inspection, and book entries treating the transactions as loans. On that material, the assessment and penalty could not be sustained, and the tribunal's contrary view was set aside.

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Issues: Whether the disputed invoices represented genuine sales liable to tax under the Tamil Nadu General Sales Tax Act, 1959, and whether the appellate tribunal was justified in sustaining the assessment and penalty.

Analysis: The assessee's case was supported by bank correspondence, affidavits of the alleged suppliers, the absence of stock at the time of inspection, and the contemporaneous treatment of the transactions as loans in the books. The available material indicated that the invoices were raised only for bill discounting and did not evidence an actual transfer of goods or a real sale transaction. In these circumstances, the tribunal's insistence on treating the documents as taxable sales was unsustainable.

Conclusion: The disputed transactions were not proved to be sales, and the assessment and penalty could not be sustained.

Final Conclusion: The revisions succeeded and the tribunal's order was set aside, leaving the assessee free from the impugned sales tax liability on the transactions in question.

Ratio Decidendi: A transaction supported only by accommodation invoices raised for bill discounting, without proof of actual sale or movement of goods, cannot be treated as a taxable sale.

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