2023 (1) TMI 1277 - HC - VAT and Sales Tax

High Court overturns Single Judge's order on stock transfer exemption, emphasizes need for fresh assessment.

M/s. Sharcstar Communications Ltd. Versus The State of Tamil Nadu, The Union of India, The Commercial Tax Officer, The State of Karnataka, The State of Kerala, Kerala.

The High Court set aside the Single Judge's order in a Writ Petition challenging the disallowance of exemption on stock transfers. The Court found that ... Maintainability of petition - petition disposed off on the ground that Appellant ought to have filed an Appeal before the Appellate authority and liberty was also given to him to file such Appeal before the Appellate authority within a period of thirty days - HELD THAT:- There are merit in the submission of the learned Senior Counsel appearing for the Appellant inasmuch as the impugned order of assessment has been made by the assessing officer without even applying his mind to the submission of the appellant, in particular to the order of the Tribunal holding that mere sales of goods on the same day by itself would not be conclusive in determining the character/ nature of the transfer from one state to another as Stock transfer (or) sale. The above order of the Tribunal ought to have been dealt with by the assessing officer. Failure to do so would vitiate the order. We make it very clear that we have not examined the decision but only decision making process which we find suffers from the infirmity of non application of mind to relevant aspects/factors raised by the assessee/appellant. The order of the learned Single Judge dated 06.10.2017 is set aside and the matter is remanded back to the authority concerned. Issues:Challenge to order of learned Single Judge in Writ Petition, Disallowance of exemption on stock transfers, Failure to consider submission on sales of goods, Non-application of mind by assessing officer, Remand for fresh assessment under Section 6A of Central Sales Tax.Analysis:The appeal was filed against the order of the learned Single Judge in a Writ Petition, where the appellant was directed to file an appeal before the Appellate authority regarding the disallowed claim of exemption on stock transfers. The appellant argued that the disallowance was based solely on goods being sold on the same date, which does not conclusively determine interstate sales or stock transfers. Reference was made to a judgment of the Sales Tax Appellate Tribunal, which the assessing officer failed to consider in the impugned assessment order.The High Court acknowledged the appellant's submission, noting that the assessing officer did not apply his mind to the Tribunal's decision that same-day sales do not definitively establish the nature of the transfer. The Court emphasized that the decision-making process should have addressed the relevant factors raised by the appellant. While the Court did not delve into the Tribunal's decision itself, it found a flaw in the failure to consider crucial aspects, which rendered the order defective.Consequently, the High Court set aside the Single Judge's order and remanded the matter to the authority concerned for a fresh assessment under Section 6A of the Central Sales Tax. The Assessment Officer was directed to reevaluate the claim of stock transfer, allowing the appellant to submit objections, documentary evidence, and declaration forms in support of their claim within three weeks. The Respondent was instructed to complete the assessment within two months of receiving the objections, providing the appellant with a personal hearing opportunity. No costs were awarded in this matter.