TaxTMI 
TaxTMI 
2014 (7) TMI 276
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....er of the Appellate Tribunal setting aside the penalty, though the consignee approached the officer for release of the excavator, it was not released. He thereupon filed a writ petition See page [2014] 67 VST 354. for directing release of the excavator. The learned single judge disposed of the said writ petition by directing that if the State did not file revision against the order of the Appellate Tribunal within a period of fifteen days, the excavator must be released to the consignee. It is feeling aggrieved by the same that the consignee has preferred Writ Appeal No. 121 of 2013. It would appear that the consignee had availed of a loan from M/s. Indus Ind Bank Ltd. in connection with the purchase of the excavator. In the light of the detention of the excavator, the bank filed a writ petition See page [2014] 67 VST 353. for a direction that the excavator shall be released to it. The said writ petition being unsuccessful, the bank has preferred Writ Appeal No. 1714 of 2012. Since the State had filed a revision petition within the time granted by the learned single judge and it is found that there was a prima facie case made out, this court had granted stay of the order of t....
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....tax attempted to be evaded, as may be estimated by such officer." Under section 47(2), inter alia, on the basis of a suspicion that the transporter is attempting to evade payment of the tax due, it is open to the officer to detain the goods. Thereafter, the officer unless it be that the tax has been paid and he drops the proceedings, must proceed to make an adjudication. The procedure for making the adjudication is as contemplated under section 47(6) of the Act. Section 47(6) of the Act provides that if the officer finds that there has been an attempt to evade the payment of tax that he shall impose penalty, not exceeding twice the rate of tax sought to be evaded on the owner of the goods. The penalty can be realised by sale of the goods. Section 47(15) of the Act contemplates refund of the excess amount realized on the sale of the goods to the owner of the goods. Now let me turn to the facts: The consignee claims to be a works contractor. According to him, a quotation was given in December, 2011. Under receipt, a sum of Rs. 17,60,000 was given by him to the consignor. The consignee availed of a loan from the Indus Ind Bank. The first instalment towards the loan was paid t....
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....ng stock as on March 31, 2011. Without any accounted purchase of the excavator or availability in opening stock, it is found that it is sure that the seller is disabled in accounting properly its sale. Hence he can only suppress the sales even though the transport is supported by 8B bill. It is stated that there is no doubt about the transportation and transactions would have been unnoticed, but for the detention. It is thereafter found that considering the facts and figures it is proved that the consignor as well as the consignee maliciously colluded to defraud the exchequer and thereby a clear attempt to evade tax legitimately due to the State exchequer is involved in this case. A penalty of Rs. 13,13,830 was imposed being double the amount of tax attempted to be evaded. It is further ordered that the consignor/consignee is directed to pay the penalty as demanded within fifteen days of the receipt of the demand notice. The appellate authority dismissed the appeal. It was found that the consignor and consignee have colluded. It is, inter alia, found by the first appellate authority that the consignee had paid an advance of Rs. 17,60,000 in cash and the bank had given Rs. 36,00,000....
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....nment Pleader would submit that the finding of the Tribunal cannot be justified. As found by the adjudicating authority and the appellate authority, there was clear attempt to evade payment of tax. According to him, under section 47(6), once it is found that there is attempt to evade payment of tax, penalty can be imposed. He would submit that what is relevant is only that there must be an attempt to evade payment of tax. The learned Amicus Curiae would submit that when there is a concluded sale and there is proof of payment of tax by the buyer to the seller who collects as an agent of the Government then the attempt by the seller to evade the tax is to be ignored under section 47 of the Act. He also would submit that it may be true that there was an attempt to evade payment of tax by the seller. He would submit, not doubt, that non-mentioning of the TIN number in the invoice is a matter which would point to there being collusion. This is for the reason that if the TIN number is indicated, the authorities are enabled to get for the details and prevent tax evasion. In this regard, he referred this court to section 40A(2) of the Act which reads as follows: "40A. Issuance of sale b....
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....ent and what is more, he had paid the entire tax to the seller who collects as the agent of the Government. The learned counsel for the consignee would contend that there is no merit at all in the Government's revision. He would submit that the consignee was a works contractor who is having registration at Kollam. He has been allowed to pay tax on the compounded basis. He would submit that much significance cannot be attached to the omission of the TIN number in the invoice. According to him, the omission of the TIN number is irrelevant because the sale to the consignee in this case is as an end-user. He is not buying it for the purpose of resale. It may be true that he is a dealer who is registered under the Act, but when he is purchasing it for his own use, namely, in his contract business, no significance can be attached to the omission of the TIN number. He would submit that it was for the seller to have included the same. He contended that possibly the consignor would have accounted the purchase of the excavator in January, 2012. He further, poses a question as to why the Department had not taken any action against the consignor. According to him, it is always open to t....
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....ding on which lines, was sought by the consignor. But, no details are forthcoming. Shri G. Bhagavat Singh would also contend that the writ appeal filed by him must be allowed and the writ petition filed by him for release of the excavator should have been allowed, he contends. Once the Tribunal set aside the order of penalty, there is no basis at all for the Department to not release the vehicle, he complained. The fundamental question to be considered is whether the levy of penalty in this case is justified and the appellant is liable to pay the penalty. This court would in this context scan the case law made available. In the first place, this court would refer to the following case law relied on by the Amicus Curiae: (i) In Govindan & Co. v. State of Tamil Nadu [1975] 35 STC 50 (Mad), a Bench took the view that to claim the benefit of a second sale exemption, the assessee need not show that their sellers have in fact paid tax and it is enough if they show that the earlier sales are taxable sales and the tax is really payable by their sellers. The learned Amicus Curiae would apparently seek to contend that if that be the position, it may not be appropriate to fasten liabili....
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....es of the milk powder. The vehicle was intercepted having no records to accompany the transport. The petitioner's claim that the sales were second sales was rejected and it was held that there was attempt at evasion. The court took the view that admittedly the petitioner was second seller of milk powder and that when there were no proper and valid documents, it may be possible to presume that there was an attempt to evade tax. But, the court further held that it is only an inference or a presumption of fact. The court further held that there was a duty to consider the plea of the petitioner that he was only indulging in second sales which is not taxable and even if the transport was not accompanied by proper and valid documents, no penalty would be exigible because it could not be said that there was an attempt to evade tax due under the Act. The matter was remitted back to the Tribunal to consider the aspect. (vi) In State of Tamil Nadu v. Govindan & Co. and State of Tamil Nadu v. Raman & Co. [1994] 93 STC 185 (SC) the apex court was dealing with a case of purchase of condemned coaches and nissen huts in public auction and sale after dismantling as scrap. The said sale was ....
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....enuine and not thereafter to substantiate its truthfulness by running from pillar to post to collect the material for its authenticity. In the absence of any mala fide intention, connivance or wrongful association of the purchasing dealer with the selling dealer or any dealer earlier thereto, no liability can be imposed on the principle of vicarious liability. Law cannot put such onerous responsibility on the purchasing dealer otherwise, it would be difficult to hold the law to be valid on the touchstone of articles 14 and 19 of the Constitution of India. The Department is required to allow the claim once proper declaration is furnished and in the event of its falsity, the Department can proceed against the defaulter when the genuineness of the declaration is not in question. However, an exception is carved out in the event where fraud, collusion or connivance is established between the registered purchasing dealer and the immediate preceding selling registered dealer or any of the predecessors selling registered dealer, resulting in the benefit contained in form VAT C4 not being available to the registered purchasing dealer. The aforesaid interpretation would result in achieving t....
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....llowing view: "The shipowners' appeal would be allowed for the following reasons- (1) Under the original contract of July 1976 the property in the goods was not to pass to the buyers until the sellers received a bill of exchange endorsed by the buyers' bank and therefore under section 19(1) of the 1979 Act the property in the steel remained with the sellers until that condition was met, notwithstanding the delivery of the steel to the buyers or to a carrier for transmission to them. It was to be inferred from the actions and statements of the parties that when they agreed in October 1976 that the steel was to be held by the buyers 'to the order of' or 'at the disposal of' the sellers they did not intend to change the original terms of sale but merely intended that because security in the form of a bill of exchange was not available the sellers would retain ownership until the steel was resold. Furthermore, since the buyers had represented themselves as being the sellers' agents, and had acted as if they were, when presenting the bill of lading to the shipowners' agents and taking delivery of the steel it was not possible to imply a contract bet....
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....uestion of intention which is laid down in the English cases as the determining factor. Where according to the usage of trade at Chandpur the sale of jute by fariahs is not complete until the goods are examined, selected and weighed by the company (purchaser) although stored in the godowns of the company by whom advances have been made to the fariahs against these goods." (viii) In Arcot Mills Limited v. State of Tamil Nadu [1984] 55 STC 356 (Mad), a Bench of the Madras High Court held, inter alia, as follows: "The special term regarding passing of property in the contracts could not prevail over the fiscal statute, or bind the taxing Department, whatever might be its binding force or merit as between the parties, as a term in the contract. Therefore, the special term in the contract in the instant case was powerless against the inexorable application of the statutory provisions." Now, let this court consider the case law relied on by the consignee: (i) In P.K. Aboobacker v. State of Kerala [1979] 44 STC 250 (Ker), the constitutional validity of section 29A of the KGST Act was challenged. Therein, it was, inter alia, held as follows (page 258 in 44 STC): ". . . Seizu....
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....nt under which the lender is given the licence to seize the goods." (iii) In Executive Engineer v. Sri Seetaram Rice Mill [2012] 2 SCC 108, the apex court was considering the provisions of the Electricity Act, 2003. Therein, inter alia, the court held as follows: "35. All these explanations clearly show that dishonesty is a state of mind where a person does an act with an intent to deceive the other, acts fraudulently and with a deceptive mind, to cause wrongful loss to the other. The act has to be of the type stated under sub-sections (1)(a) to (1)(e) of section 135 of the 2003 Act. If these acts are committed and that state of mind, mens rea, exists, the person shall be liable to punishment and payment of penalty as contemplated under the provisions of the 2003 Act. In contradistinction to this, the intention is not the foundation for invoking powers of the competent authority and passing of an order of assessment under section 126 of the 2003 Act." He also drew support from the judgment of the Punjab and Haryana High Court in Gheru Lal Bal Chand v. State of Haryana [2011] 45 VST 195 (P&H). Findings: The first question to be considered is whether this is a case whe....
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....g under section 47(6) of the Act. The consignor has not contested the imposition of penalty which the adjudicating officer has imposed on him also. He has not carried the matter in appeal. He must be treated as having accepted the findings. Even then, this court notice, as pointed out by the learned Government Pleader, that the Appellate Tribunal has set aside the order of penalty. Thus, the order of penalty does cease to operate even against the consignor. Therefore, this court is of the clear view that there was attempt on the part of the consignor to evade payment of tax. In the facts of this case, a further question arises whether the aforesaid finding is sufficient for the disposal of the matter. This is for the reason that under section 47(6) of the Act, penalty can be imposed only on the owner of the goods. The Act provides for multi-point taxation unlike the provisions of the KGST Act. No doubt, under the KGST Act also, there are certain goods which were subjected to multi-point taxation. I must undoubtedly bear in mind that section 47(6) of the Act enables imposition of penalty. Penalty is to be imposed for the contravention of some law. It is established that all penal....
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....her the consignor or the consignee is the owner of the goods. Both of them could not possibly be treated as owner of the goods at the same point of time. Property in the goods is with either of them. Property passes on a sale of goods as contemplated under the Sale of Goods Act, 1930. Section 19 of the said Act reads as follows: "19. Property passes when intended to pass.-(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. (3) Unless a different intention appears, the rules contained in sections 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer." Therefore, the question as to whether there has been a completed sale is to be determined on the facts of each case and on a conspectus of the contract, the intention of the parties, their conduct and the rules which have b....
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.... under section 67 of the Act, when an order of penalty may be passed which may turn out to be incapable of being realized, in the case of the penalty order which is passed under section 47(6) of the Act, the Legislature intends the effective realization of the penalty also by the sale of the goods which are detained. No doubt, I must deal with the further question as to whether the buyer being innocent of any guilty mind, no penalty can be imposed by the sale of the goods under section 47 of the Act. There is no positive finding rendered by the authorities including the Tribunal as to whether the consignor or the consignee is the owner of the goods. But, the question which arises is whether as contended by the learned Government Pleader, the fact being proved that the seller made an attempt to evade the payment of tax due, is sufficient for imposition of a penalty. This court find no merit in the contention of the learned counsel for the consignee that the tax having been paid by the consignor on February 17, 2012, the adjudicating authority acted illegally in further probing the question as to whether there was an attempt to evade the payment of the tax due. As noticed by us, the ....
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....oods were being carried by a carrier. There is not much dispute that the carrier was engaged by the consignor. No doubt, the consignee has a case that it was being dispatched by the consignor at his instance. As far as the carrier is concerned, this court would proceed on the basis that he was an agent of the consignor. The driver has given a statement wherein he has, inter alia, stated that the excavator was being taken to near Rajagiri College, Pothenkode as directed by Viswambharan (consignee). The driver has given the consignee's mobile number which was given to him. It is thereafter that section 47(6) of the Act contemplates an inquiry. The officer is obliged to issue notice to the owner of the goods. An opportunity of being heard is to be provided to the owner of the goods. At the conclusion of the inquiry, the section further mandates that if there is an attempt to evade tax, the officer is to impose penalty on the owner. The penalty is to be on the basis of the tax attempted to be evaded and the maximum amount of penalty is twice the tax attempted to be evaded, as is estimated by the officer (the tax sought to be evaded is to be estimated by the officer). Rule 67 of ....
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....n the goods is to pass to the buyer." At this juncture, it is necessary to consider what is meant by "specific goods". "Specific goods" is defined in section 2(xiv) as goods identified and agreed upon at the time a contract of sale is made. As far as the words "ascertained goods" is concerned, this court may notice the following commentary in Pollock & Mulla in the Sale of Goods Act (Sixth Edition): "The term 'ascertained goods', which also occurs in section 58, is not defined by the Act; see notes to that section, below. It is, however, clear that the words 'specific goods' bear the meaning assigned to them in the definition clause, 'goods identified and agreed upon at the time a contract of sale is made.' 'Ascertained' probably means 'identified in accordance with the agreement after the time a contract of sale is made'." Therefore, in the case of a contract for the sale of "specific" or "ascertained goods", what is crucial is the intention of the parties. Intention is to be ascertained on the basis of the terms of the contract, the conduct of the parties and the circumstances. Section 20 contemplates property in the goods passing ....
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....Act deals with consent on approval or sale or return. In this case, there is no finding as to whether the consignor or the consignee is the owner. In fact, the officer has imposed penalty on both which is plainly impermissible. This question has not also engaged the attention of the fact finding authorities. I have already found that the consignor did have the intention to evade payment of tax. Still further, even if it is a case where the consignor and the consignee colluded or if the consignee was in any way privy to the consignor, attempting to evade the tax, then also, the imposition of penalty by sale of the goods as contemplated in the Act cannot be faulted. Then there is the third situation which is where the consignee is completely innocent of any wrong doing. In this case, as pointed out by the learned Amicus Curiae, the circumstance that the TIN number of the consignee was not indicated in the invoice, is a lapse. The indication of the TIN number is rendered mandatory by virtue of the provisions of section 40A(2) of the Act. The answer of the consignee is that even though the consignee is also a dealer, in as much as the particular transaction related to the purc....
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....the identity of the purchaser. In case the purchaser was below the registerable limit, he was given the option of filing a declaration as in the case of individuals wanting to get exemption from tax deduction at source under the Income-tax Act, 1961, who have to give a declaration in form 15G. However, there have been representations from the trade that para 10 of the circular read above which states that if the purchasing dealer is untraceable at the address given in the bill then action shall be taken against the selling dealer, has created certain apprehensions. In the circumstances, it is clarified that action shall be taken against the selling dealer only where fraud and collusion between the selling dealer and the purchasing dealer in the transaction is proved. It is further clarified that security deposit shall be collected on consignments which do not comply with the requirements of subsections (1) and (2) of section 40A at twice the difference between the tax on MRP and billed price of the consignment. The circular read above stands modified to the above extent. (No. C1-10760/07/CT, office of the Commissioner, Commercial Taxes, Thiruvananthapuram, dated October....
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....nsignee, he had actually intended a resale and the goods were detained at or near the place of the proposed second buyer of goods or the proposed buyer of the goods from the consignee, clearly there will be an attempt on the part of the consignee/owner to defeat the due payment of tax. In a case where large number of goods are being transported, there could be attempt to evade tax by diverting and attempting to sell part of the goods. All these things could have been irrelevant in a tax regime which contemplated tax at the first point of sale in the State by a dealer liable to tax where the tax had already been paid on the taxable transaction. The other way to look at the issue is the large part of the tax evasion or attempted tax evasion would be practiced by the sellers, like the seller in the facts of this case. It is quite clear that, but for the detention of the goods, in all likelihood, he would not have filed the monthly return on February 17, 2012, after the detention of the goods on February 8, 2012 and paid the tax. If the interpretation of the consignee is accepted, section 47(6) of the Act is not at all available to the officer and the only remedy, as far as penal ac....
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....st also notice that the question as to ownership of the goods, must be decided with reference to a point of time not later than the date of detention. That is a point of time when the officer entertains suspicion that there is intention to evade the tax under section 47(2) of the Act. Therefore, the question would be as to who is the owner of the goods at least as on the date of detention of the goods under section 47(2) of the Act. The learned Government Pleader, no doubt, would contend that in a case where there is a sale and the ownership has passed and the goods are detained and the buyer/owner is completely innocent, in that, he has acted bona fide and even paid the tax inclusive amount, it may have a bearing only on the quantum of penalty. I am of the view that under section 47(6) of the Act, when there is an intention of the seller of the goods to evade the tax which is established, it may be accompanied by the buyer being party to such guilty intention entertained by the seller. In such a case, even if the title to the goods had passed to the buyer, there can be no doubt that the penalty under section 47(6) of the Act can be imposed on the owner of the goods to be rea....
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....tood assured of payment of the full price through the medium of the arrangement made with the bank. There is delivery effected to the carrier. In this case, there is delivery of the goods effected through the goods being delivered to the carrier for being sent to the buyer. The statement of the driver or the transporter, is on record to the effect that the goods were being taken as instructed by the consignee. Therefore, in the circumstances of this case, this court would hold that the consignee is the owner as this is the finding which this court can arrive at on the materials on record. In the circumstances of this case, this court is, therefore, of the view that the penalty must be sustained on the consignee, treating him as owner of the goods and on the basis that the seller entertained the intention to evade the tax unambiguously and the buyer (consignee) did colluded with him as found by us. However, as far as the question of quantum of penalty is concerned, this court is of the view that relief must be given to the party. Twice the amount of tax (Rs. 5,25,000) is Rs. 10,50,000. There is complaint that the penalty levied exceeds even twice the amount of tax. This is a c....
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....fter the sale of the vehicle by the Department and adjustment of the penalty amount imposed, if the owner of the goods did not pay the penalty imposed in this case. Except that right, they have no right to get delivery of the vehicle as they are not owner of the goods. So, we do not find any reason to interfere with the finding of the learned single judge on this aspect. As regards the writ appeal filed by Sri Viswambharan, namely W.A. No. 121 of 2013 is concerned, the learned single judge has dismissed the writ petition on the ground that the State wanted to file a revision against the order of the Tribunal and so, there is nothing wrong in granting reasonable period for the State to file a revision and during that time, retaining the goods with the Department cannot be said to be illegal or unjustifiable. So, we do not find any reason to interfere with the finding of the learned single judge on this aspect as well. The main issue involved in OTR No. 9 of 2013 filed by the State is whether the Tribunal was justified in setting aside the concurrent finding of the adjudicating authority and the first appellate authority and exonerating the appellant herein from payment of pena....
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....ents produced in support of the transport of goods evidence defects of a minor or technical nature only and the goods are owned by a dealer registered under this Act, such officer may allow the goods to be transported after realizing the tax on the turnover of the goods under transport." So, it is clear from the above provision that at that time, the intercepting authority need only satisfy that there is suspicion of an attempt to evade payment of tax by the owner of the goods, or the person transporting the same and the goods were not supported by valid documents representing the real sale at that time and he need not consider as to whether there was actual evasion of tax or attempt to evasion of tax. Suspicion is only subject to the satisfaction of the intercepting officer and nothing more at that time. Section 47(6) of the Act says that the officer authorised under subsection (5) shall, before conducting the inquiry, serve notice on the owner of the goods and give him an opportunity of being heard and if, after the enquiry, such officer finds that there has been an attempt to evade tax due under this Act, he shall, by order, impose on the owner of the goods a penalty not exce....
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....isions under the Haryana Value Added Tax Act and Rules, 2003, observed that no liability under the Haryana Value Added Tax Act, 2003 could be fastened on the purchasing registered dealer on account of non-payment of tax by the selling registered dealer in the treasury, unless fraudulence, collusion or connivance of the registered selling dealer or its predecessors with the purchasing registered dealer was established. It is also observed in the same decision that there is no vicarious liability in the case of evasion of payment of tax by one person on another person. It is further observed in the same decision that in legal jurisprudence, the liability can be fastened on a person who either acts fraudulently or had been a party to the collusion or connivance with the offender. However, the law envisages to impose no penalty either directly or vicariously where a person is not connected with any such evasion or act. Law cannot envisage an almost impossible eventuality. In the absence of any mala fide intention, connivance or wrongful association of the purchasing dealer with the selling dealer or any dealer earlier thereto, no liability can be imposed on the principle of vicarious l....
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....he buys for his own use or to sell it again. In the same decision, it has been observed that the mere receipt of goods does not amount to acceptance and before the buyer can be called upon to accept the goods, he can claim a reasonable opportunity to examine the goods. That opportunity has to be given by the seller on request by the buyer. The right of examination is closely connected with the acceptance of goods and passing of the property. In the decision reported in Commissioner of Customs, Kolkata v. Grand Prime Limited [2003] 5 SCC 762, it has been observed that if the import of certain goods by the importer is in violation of relevant rules and the documents produced are not genuine, then, the authorities are entitled to impose penalty and the exporter is not entitled to get back the articles. Further, in the decision reported in Bharat & Co. v. Trade Tax Officer [2006] 144 STC 81 (SC); [2005] 6 SCC 796, it has been observed that mere entry of the purchaser's name in the consignment note is not sufficient to hold that the title in the goods has passed to the purchaser. In the decision reported in Commissioner of Income-tax v. Bhopal Textiles Ltd. [1961] 41 ITR 72....
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....ioned by the seller, set aside the finding of the authority below that there was an attempt on the part of the seller for evasion of the tax, but for the detection, he would not have paid the tax and making him liable for the penalty was also set aside by the Tribunal and it was left open to the authorities to proceed against the seller afresh, which also appears to be unsustainable in law. So, on those two grounds, the approach made by the Tribunal in exonerating the buyer from the liability, appears to be not correct, especially, when no reason has been given by the Tribunal for setting aside the finding of the authorities below that there was connivance between the seller and the buyer in evading tax by the seller as found by the first appellate authority. Though the owner of the goods has not been defined under the Act, "sale" has been defined under section 2(xliii) of the Act, which reads as follows: "'Sale' with all its grammatical variations and cognate expressions means any transfer whether in pursuance of a contract or not of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or for other valuabl....
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.... it to be transferred. Sub-section (2) of that section says, for the purpose of ascertaining the intention of the parties regards shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. Sub-section (3) says that unless a different intention appears, the provisions contained in sections 20-24 are the rules ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. Section 20 of the Sale of Goods Act says, whether there is an unconditional contract for the sale of specific goods in deliverable state, the property in the goods passes to the buyer, when the contract is made and it is immaterial whether the time of payment of the price or the time of delivery of goods or both is postponed. Section 26 of the Act says, unless otherwise agreed the goods remain at the sellers risk, until the property therein is transferred to the buyer but when the property therein it is transferred to the buyer, the goods are at the buyer's risk, whether delivery has been made or not. Provided that where the delivery has been delayed through the fault of either buyer or seller, the goods are at th....
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....eby handed over possession of the goods to the ship in terms of the bill of lading or other documents, the responsibility of the seller ceases and the delivery of the goods to the buyer is complete. The goods are from that stage onwards at the risk of the buyer. In the decision reported in Agricultural Market Committee v. Shalimar Chemical Works Ltd. JT 1997 (5) SC 272, it has been held that by virtue of sections 19 and 20 of the Sale of Goods Act, the title to goods passes to the purchaser as soon as the contract is made in respect of specific goods in deliverable state and does not depend on payment of price, and this is subject to the contract to the contrary. So it is clear from the above dictum that normally, the title of goods passes to the buyer in the case of an ascertained goods at deliverable state on the date on which the contract was made, and it will be deemed to have been delivered at that place. If there is contract to the contrary, then that will depend upon the terms of the contract. In this case, though in the quotation given, it was mentioned that full payment was against delivery, as per the definition of "sale", deferred payment will not prevent passing of p....
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....e., on December 16, 2011. The invoice that accompanied the goods was dated January 20, 2012. There is nothing on record to show that the excavator was available with the seller even at that time as his stock statement does not reveal the existence of such excavator with the seller and he was not authorized to deal with the excavator as well. Though the counsel for the buyer asserts that he had an opportunity to verify the excavator before the invoice was drawn, it was not possible in view of the evidence available which would indicate that he also wanted to help the seller in effecting the sale of the excavator for which he had no registration to sell as well. Being a purchaser paying huge amount, he ought to have verified whether the seller has got any registration for sale of this article before entering into a contract of sale with him, which he had not intentionally done. This would indicate that he also wanted to help the seller to effect the sale and avoid payment of tax by the seller if it was not intercepted by the authorities. So, it cannot be said that the article intended to be sold was at a deliverable state at the time when the contract was alleged to have been made....
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.... but for the intervention by the authorities. The fact that the original invoice alone accompanied the goods along with the transport of goods is also an indication that if the article was not intercepted by the authorities, he would not have paid the tax. Further rule 58(11) of the Kerala Value Added Tax Rules says that in the case of transit as follows: "Every such bill or invoice or cash memorandum, shall be prepared in duplicate unless a different procedure is prescribed by the Central excise law or any other Central legislation, as applicable to such dealer, and shall be serially machine numbered. Where the goods sold are transported in a vehicle or vessel or where the goods are transported through any check-post, such bills, invoice or cash memorandum shall be issued in quadruplicate. Where the bill is issued in duplicate original shall be issued to the purchaser in the case of sale bill, and to the seller in the case of purchase bill, and the other copy shall be retained by the dealer. In the case of quadruplicate bills, the duplicate shall be used as transport copy, triplicate shall be filed at the check-post, in the case of transport of goods across the check-post an....
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.... liable to be proceeded against, and penalty has to be imposed. It is clear from the circumstances that the buyer is also colluding with the seller in the attempt of evasion of tax. It may be mentioned here that he was alleged to have paid Rs. 17,60,000 as advance with the seller on December 21, 2011. He had not shown the source for payment of the same. Further in the invoice, the sale being by a registered dealer to another registered dealer, it must contain the TIN number of the buyer which has not been furnished by the buyer to the seller intentionally and that was not mentioned in the invoice by the seller as well. The contention of the counsel for the buyer that he being the end-purchaser, the nonmentioning of TIN number is not fatal cannot be accepted because he being a works contractor, the possibility of his giving the excavator on rent to others, which is also deemed to be a sale for the purpose of this Act can not be ruled out and in such circumstances, it cannot be said to be obtained by the buyer for his own purpose alone. Further, he was not prepared to produce his accounts before the Intelligence Officer, when he was called upon to produce the same and he had submi....