Court rules dealer liable for tax due to missing Form-F on stock transfer of readymade garments

The court upheld the assessing authority's decision to delete tax on a turnover amount due to the absence of Form-F in a case involving a dealer of readymade garments. Relying on Section 6-A of the Central Sales Tax Act, the court emphasized that stock transfer without Form-F is deemed a sale. The court differentiated this case from precedent, clarifying that the absence of Form-F and failure to justify its non-submission rendered the dealer liable for tax payment. The court ruled in favor of the revenue, holding the dealer accountable for paying tax on the turnover amount.

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Issues:
Challenge to deletion of tax amount due to absence of Form-F.

Analysis:
The case involved a challenge to the deletion of tax on a turnover amount due to the absence of Form-F. The dealer, engaged in the business of readymade garments, claimed to have returned stock to a principal outside the state without Form-F. The assessing authority disallowed the claim, citing Section 6-A of the Central Sales Tax Act. The first appellate authority and Tribunal, however, allowed the appeal, relying on precedents like M/s Ambica Steels Ltd. vs. State of U.P. The revenue challenged this decision, arguing that the statutory presumption of sale in the absence of Form-F should apply. The court noted the clear provision of Section 6-A(1), which deems stock transfer without Form-F as a sale. The court emphasized that any decision pre-dating the 2002 amendment to Section 6-A would not be relevant.

The court discussed the judgment in M/s Ambica Steels Ltd., where the Supreme Court allowed re-assessment upon submission of Form-F, but clarified that the absence of Form-F would not lead to penalty or interest in certain circumstances. The court distinguished this case from the present matter, where Form-F was never applied for. The court held that the absence of Form-F, coupled with the failure to provide any material justifying its non-submission, rendered the dealer liable for tax payment. The court concluded that the first appellate authority and Tribunal erred in interfering with the assessing authority's order. Consequently, the revision was disposed of in favor of the revenue, upholding the liability of the dealer to pay tax on the turnover amount.

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