TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 276
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....ide 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 the Appellate Tribunal. Thereafter, this cou....
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....icer." 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 to the bank on January 25, 2012. The invoice is dated January 20, ....
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....ale. 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 thus Rs. 53,60,000 (the invoice is for Rs. 47 and odd lakhs). It is found that being a registered dealer, the consignee should have explained the source of cash payment. It is also found that the ....
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....ording 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 bill by dealers.-(2) Where a dealer effects taxable sale, he shall furnish the name and address of the purchaser in the sale bill/invoices, and where the sale is to a dealer, the address shall include TIN....
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....vision. 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 the Department to proceed against the consignor as was allowed by the Tribunal. He refers to section 67 of the VAT Act. He would submit that the transaction was a genuine transaction and it was financed by the bank. The ....
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.... 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 liability on the consignee in this case when he has already paid tax to the consignor who collects the amount as an agent of the Government. (ii) In Madras Rubber Factory Ltd. v. State of Kerala [1987] 67 STC 183 (SC), a Bench of t....
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....ok 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 second sale which was not taxable. The apex court confirmed the view of the Madras High Court that there was no duty to show that the sellers had paid tax at the first point, thus confirming the decision in State of Madras v. Raman & C....
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.... 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 the purpose of the rule which is to make the object of the provisions of the Act workable, i.e., realization of tax by the Revenue by legitimate methods." Now, let this court turn to the case law cited by the learned Government Pleader: (i) I....
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....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 between the buyers and the shipowners on the terms of the bill of lading. Accordingly, title and the right to sue the shipowners in contract had never passed to the buyers." (iv) In Bharat & Co. v. Trade Tax Officer [2006] 144 STC 81 (SC); [2005] 6 SCC 796,....
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....ugh 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): ". . . Seizure of goods is allowed only if security is not furnished. No doubt it is a temporary restriction in the movement of goods. But, the property in the goods continues to be with the owner unlike in the case of confiscation. The danger of losing custody and control of the goods ....
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....e 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 where this court could hold that the intention of the consignor to evade payment of tax has been established. I am of the view that this is a case where as held by the officer and by the appellate authority, the intention of the seller to evade the payment of tax stood established. Even the ....
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....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 penalties do not require the establishment of mens rea. According to the learned Government Pleader, under section 47(6) of the Act, irrespective of the question as to whether the consignee colluded with the consignor, penalty can be imposed once there was a finding that there was an attempt to ....
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....9 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 been adverted to in section 19 of the Sale of Goods Act. The invoice is purported to be dated January 20, 2012. According to the consignee, a large advance stood paid to the consignor prior to the date of the invoice (nearly Rs. 17 lakhs). The bank is alleged to have made the payment on February 13, 201....
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....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 detention was on February 8, 2012. Not only was there ground for detention, but even at the time of adjudication, inasmuch as the payment of tax on the basis of the return filed was after the date of detention, such filing of return and payment of tax, could in no way take away the reasonable and irresis....
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....e 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 the KVAT Rules is the rule which is connected with section 47 of the Act. Rule 67(3) of the KVAT Rules reads as follows: "67. Procedure for inspection of goods in transit.-(1) and (2) . . . (3) The officer recording the statement under sub-section (5) of section 47 shall obtain, from the person in charge of ....
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....ng 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 when the contract is made. There are three requirements, however, to be fulfilled to apply the said provision. They are as follows: (i) There must be an unconditional contract for the sale of goods. (ii) Secondly, such contract must relate to sale of specific goods. (iii) Lastly, the specific goods as aforesaid must be in a delive....
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....id 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 purchase of excavator as an end user and that it was not meant for resale, he purchased in his capacity not as dealer, but in connection with his own business which is as a works contract. He also contends that the address of the consignee is indicated in the invoice and the provisions (section 40A) cast a duty on the consignor and the consignee, cannot be blam....
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....hich 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 31, 2007). Invoice in form 8 is a tax invoice. Invoice in form 8 is to be issued by a manufacturer or trader who effect sale to a person other than an endcustomer-See rule 58(10) (i). Form 8B is the retail invoice and it is to be issued when sale is to the end-consumer. Learned Government Pleader does contend that there is a clear possibility that the consignee colluded with the consignor in so f....
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....ting 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 action is concerned, would be to resort to section 67 of the Act. Under section 67 of the Act, it must immediately be noted that after passing the orders of penalty proceedings against the wrong doer in many cases, would be defeated by the officer realizing that the delinquent has no assets to proceed against. Under section 47 of the Act, by virtue of the goods being detained, they become available for being....
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....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 realized by the sale of the goods as provided under section 47 of the Act. Undoubtedly, if the seller continues to be the owner of the goods, nothing more remains to be enquired and his guilty mind would clothe the officer with authority to visit him with penalty by sale of the goods. There may be cases where the buyer/owner may not share the intention. There may be circumstances from which one could readily infer that the....
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.... 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 case where there was a bank transaction. The tax has been paid. In the circumstances, I set aside the order of the Tribunal and the order of the intelligence officer as affirmed by the appellate authority will stand modified and there will be an order imposing penalty in a sum of Rs. 3,00,000 (rupees three lakhs) on the consignee treating him as the owner. The revision filed by the State is allowed as above. This court see no merit....
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....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 penalty on the ground that he is a bona fide purchaser of the goods and even setting aside the order against the seller as well, though he did not file any appeal. The other question of law involved in this case is "who can be said to be the owner of the goods at the time of detaining the goods by the detaining authority?" As regards the second point is concerned, none of the authorities have gone into the question as to who is the owner of the goo....
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....ax 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 exceeding twice the amount of tax attempted to be evaded, as may be estimated by such officer. So, it is clear from this that the adjudicating officer must give an opportunity to the owner of the goods and come to the conclusion, on the basis of the materials available, that there has been an attempt to evade tax due under the Act and only if such a conclusion has been arrived at by the officer, he is expected to impose penalty under this section. This wa....
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....ision 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 liability. Law cannot put such onerous responsibility on the purchasing dealer otherwise. So, in order to fasten the liability on a purchaser, it must be proved by the Department that he had colluded or he had fraudulent intention to share with the seller in the evasion of tax payable on the goods sold. So, in such cases, the person, who is the owner of the goods at the time of detention, has to be ascertained before imposing penalty. There may be cases....
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....n 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 (SC); AIR 1961 SC 426, it has been held that a railway receipt is a document of title to goods and for all purposes, represents the goods. When the railway receipt is handed over to the consignee on payment, the property in goods is transferred and in this case, it is a matter of considerable doubt whether the property in the goods can be said to have passed to the buyer by the mere fact of railway receipt being in the name of the consignee, as has been held by ....
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....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 valuable consideration, but does not include a mortgage, hypothecation, charge or pledge." Explanation III to the section says, "A transfer of goods on hire-purchase or other instalment system of payment shall, notwithstanding the fact that the seller retains the title in the goods as security for payment of the price, be deemed to be a sale on the date of delivery of the goods in pursuance of the agreement of such hire purchase or other system of payment in instalments. By virt....
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....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 the risk of the party in fault as regards any loss which might not have occurred but for such fault: Provided also that nothing in the section shall affect the duties and liabilities of either seller or buyer as bailee of the goods of the other party. Section 36 deals with rules as to delivery. Sub-section (1) of that section says that, where it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on th....
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.... 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 property to the buyer if the intention can be drawn from other circumstances. Further, it is also clear from the dictums laid down in the decisions cited supra that the buyer can waive the right of inspection of the goods to be delivered and if that was waived by him, then he will take the goods at his risk and he cannot claim any benefit of non-inspection later. In this case, it is clear from the evidence that there was no possibility of the excavator being inspected by the purchase....
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....w 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 between the buyer and seller. So, there is no possibility for the buyer to examine the excavator for his satisfaction, so as to come to a conclusion that it was delivered to him on that date. Further, the fact that payment was reserved on the date of delivery also reveals that there was no possibility for the buyer to examine the same and that was the reason why the payment was postponed. All these will go to show that the buyer is having connivance with the seller in making the sale of th....
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....se 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 and the quadruplicate shall be retained by the seller. The serial numbers assigned to the bills, invoice or cash memoranda shall run consecutively for the whole year. The dealers may use the same or different series of bills, invoice or cash memoranda for goods subject to (different rates of tax, provided that the dealer shall use a separate series for the bills issued for sales under a permit under sub-section (1) of section 19. The dealer shall) intimate the series and the opening numbers of bills or....
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....en 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 submitted a reply stating that he was permitted to compound under section 8 of the Act for the year 2011-12 and he requested the authorities not to insist for production of accounts for the year 2011-12 (See his reply dated March 6, 2012 as seen in the file). But, the first appellate authority, in paragraph X at page 13 of its order, has found that no such application has been filed and he filed even the questioning statement for the first time, after its detection. The fact that he had not intimated to the ban....