2008 (2) TMI 427 - SC - VAT and Sales Tax

Appeal overturns Tribunal on intra-state sale tax in Orissa, citing lack of evidence.

The appeal was allowed, overturning the Sales Tax Appellate Tribunal's conclusions on intra-state sale within Orissa regarding the levy of sales tax on ... Whether any sale took place within the State of Andhra Pradesh? Held that:- Having decided that issue, Tribunal was not required to go into any other question particularly when the relevant factors were not before it. As rightly contended by the appellants there was no material whatsoever to show that the sales could be treated as intra-state sale within the State of Orissa. The assessing authorities proceeded to levy tax on erroneous premises. In the ultimate analysis the Tribunal held that the sales did not take place within the State of Andhra Pradesh. The conclusions to the effect that they are intra-state sales in Orissa are unsustainable. It was rightly decided that there was no intra-state sale within Andhra Pradesh. But for further conclusion that there was an intra-state sale within the State of Orissa, materials were required to be examined. That has not been done. There was no material before the Tribunal to come to a definite finding, as done, that the transaction should be treated as intra-state sale within the State of Orissa. The observations, therefore, have no relevance and need to be set aside, which we direct. Appeal allowed. Issues:Challenge to conclusions recorded by Sales Tax Appellate Tribunal regarding sales tax levy on transfer of DEPB Licenses.Analysis:The judgment pertains to challenging conclusions made by the Sales Tax Appellate Tribunal in Andhra Pradesh regarding the levy of sales tax on the transfer of Duty Entitlement Pass Book (DEPB) Licenses. The appellant, a Government of India enterprise, primarily operates in Orissa but uses Visakhapatnam Port in Andhra Pradesh for exports. The appellant obtains DEPB licenses for exports, which can be used for duty payment or sold to third parties. The Tribunal held that the sales did not occur in Andhra Pradesh but within Orissa, based on the Central Sales Tax Act, 1956. However, the appellant contested this finding, arguing that there was no sale to warrant tax levy. The Tribunal's decision to consider intra-state sale within Orissa was deemed unwarranted by the appellant, as the issue was not under dispute. The appellant had paid Central Sales Tax in Orissa despite no legal obligation to do so.The State of Andhra Pradesh contended that the Tribunal correctly determined that no sale occurred within its jurisdiction. On the other hand, the State of Orissa supported the Tribunal's conclusions, suggesting a typographical error in mentioning intra-state sale instead of inter-state sale. The Tribunal's limited scope was to ascertain if any sale happened in Andhra Pradesh, and having resolved this, there was no need to delve into other aspects without relevant evidence. The Tribunal's assertion of intra-state sale within Orissa lacked substantiating material and was deemed unsustainable. While correctly ruling out intra-state sale in Andhra Pradesh, the Tribunal's leap to conclude an intra-state sale in Orissa was unfounded. The judgment highlighted the lack of evidence supporting the Orissa intra-state sale determination, prompting the directive to set aside such observations. Consequently, the appeals were allowed to the extent of overturning the Tribunal's conclusions regarding intra-state sale within Orissa, as no factual basis supported this finding.