goods sold less than the stock inward from the other states

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of our client have received stock transfer from their head office located in mumbai. And they are selling these goods within tamilnadu lesser than the value what they have received. After they are receiving the goods to branch in tamilnadu. Based on the quantity and as per their head office instructions they are selling these goods various customers. Based on the Stock Transfer Inward the branch has to issue form F to their Head Office Full value i.e. Inward Value. While doing so the sales tax enforcement wing came their premises for inspection and stating that, being the sales value is lesser than stock inward value and the authority concerned calculate the trading account. In that, they have made sales value (-) 10% G.P. i.e. cost of purchase worked out and compared with physical stock. Obviously the difference will come. Now, they have treated as sales suppression and made it for higher rate of tax with penalty.

Can u any one provide me any suitable case law to contend the assessment order. Now, they are preferred for an appeal.

With regards,

K. Thyagarajan.

AI Summary

Client Challenges Higher Tax Rate and Penalties on Local Sales; Seeks Case Law Support for Appeal A client in Tamil Nadu received stock transfers from their head office in Mumbai and sold these goods locally at a lower price than the inward value. During an inspection, the sales tax enforcement wing noted this discrepancy and calculated the trading account, alleging sales suppression and imposing a higher tax rate with penalties. The client is seeking case law to challenge the assessment order on appeal. Respondents in the forum argue that there is no legal requirement to sell goods at a higher price than the stock transfer value, suggesting the sales should be proven as arm's length transactions.