Form F scrutiny and depot stock transfer must be decided before treating goods movement as a local sale

An assessment treating movement of goods to a Pondicherry depot as a local sale in Tamil Nadu was found unsustainable because it did not decide the assessee's core objections. The assessing authority had to examine whether the Form F declarations under Section 6A of the Central Sales Tax Act, 1956 were validly considered, and whether the goods were only transferred as stock to the depot and appropriated there rather than sold locally in Tamil Nadu. In the absence of findings on these points, the transaction could not be conclusively assessed as a local sale. The matter was therefore set aside for fresh consideration after disclosure of seized records and receipt of objections.

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Issues: Whether the assessment treating the movement of goods to the Pondicherry depot as a local sale in Tamil Nadu could be sustained without a finding on the validity of the Form F declarations and the plea that appropriation of goods took place only at the depot.

Analysis: The assessment order was found to be sketchy and to have failed to decide the two core objections raised by the petitioner. The first was whether the Form F declarations furnished under Section 6A of the Central Sales Tax Act, 1956 had been properly examined in accordance with law. The second was whether the goods were merely transferred to the depot as stock and were appropriated only at Pondicherry, so that the later movement to buyers did not amount to a local sale within Tamil Nadu. The Court held that, in the absence of findings on these issues, the transaction could not be conclusively treated as a local sale at that stage. The Court also noted that the scope of enquiry under Form F is confined to whether the goods were transferred to the assessee's branch, office, or agent, and that the assessing authority had to apply the settled legal principles governing such enquiry.

Conclusion: The assessment on the stock transfer issue could not be sustained and was liable to be set aside for fresh consideration after furnishing the seized records, receiving objections, and deciding the disputed issues in accordance with law.

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