DEPB licence sales treated as inter-State transactions where banking evidence and surrounding facts exposed a sham local-sale structure.

Sales of DEPB licences described as local sales against form S.T.-15 declarations were treated as inter-State sales because the evidence showed direct payment from outside Haryana and the local purchasers appeared to be only dummy or intermediary names. The statutory declarations did not protect transactions found to be fraudulent, and the appellant's failure to produce bank records and supporting correspondence reinforced the conclusion. On that basis, the reassessment and penalty orders were sustained and the appeals were dismissed.

---

---

Issues: Whether the sales of DEPB licences shown as local sales supported by declarations in form S.T.-15 were in truth inter-State sales liable to tax and penalty, and whether the reassessment orders could be sustained on the evidence of direct payments, banking records, and surrounding circumstances.

Analysis: The sales were found to be a camouflage. The appellant could not establish that consideration came from the alleged local purchasers, whereas the banking material showed direct payment from entities outside Haryana. The so-called local dealers were treated as dummy or intermediary names, and the statutory declarations in form S.T.-15 did not save transactions that were otherwise found to be fraudulent. The Court also noted that the appellant failed to produce the relevant bank records and supporting correspondence despite opportunities, and the surrounding facts consistently pointed to direct inter-State sales rather than genuine intra-State sales.

Conclusion: The transactions were rightly treated as inter-State sales and the reassessment and penalty orders were upheld. The appeals were dismissed.

---