AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (10) TMI 640
X X X X Extracts X X X X
X X X X Extracts X X X X
....es Tax Act, 1956 ? 3. With the consent of learned counsel for the parties, this revision is finally heard. 4. Briefly stated the facts of the present case are that the applicant is a registered dealer under the U.P. VAT Act, 2008 ( hereinafter referred to as the "Act") as well as under the Central Sales Act, 1956 ( hereinafter referred to as the "CST Act"). The applicant is a dealer of non ferrous metal scraps and metal utensils. During the Assessment Year 2009-10, the applicant disclosed stock transfer of non ferrous metal scraps and utensils for sale on commission agency basis, against which Forms-F No.03Q873645, 04Q715866, 03Q982073 and 03Q982074 are said to have been received by the applicant from M/s Rajdhani Traders, New Delhi for a sum of Rs. 4,98,43,435/-. Likewise, stock transfer of non ferrous metal scraps of Rs. 3,01,73,690/- was disclosed on commission agency basis to M/s Radhika Enterprises, New Delhi, against two Forms-F No. 03Q725091 and 03Q725092, said to have been received by the applicant. It is the case of the applicant that entire details as required under Rule 4(4) of the Central Sales Tax (U.P.) Rules, 1957 were maintained and the said provision was fully co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the applicant filed Second Appeal No. 649/2011 before the member Commercial Tax Tribunal, Allahabad Bench-II, Allahabad who allowed the appeal and remanded the matter to the Assessing Authority to examine the despatches and other evidences of the aforesaid alleged declared stock transfer. Aggrieved with the order of the Tribunal, the applicant has filed this revision raising aforementioned questions of law. 7. Sri Rakesh Ranjan Agarwal, learned Senior Advocate submits as under :- (i) The cosignor and the aforesaid consignees, are registered dealers. (ii) Form-F in question were validly issued by the Delhi VAT Department to the consignees. Even if, these forms were issued to the dealers other than the aforesaid two consignees yet it cannot be doubted that these three forms were actually issued by the Delhi VAT Authority and the forms are not forged. (iii) The applicant has complied with all the requirements of Rule 4(4) of the CST (UP) Rules, 1957 and as such the benefit of Form-F cannot be denied. (v) There is no allegation of collusion between the applicant and the aforesaid two consignees for procurement of the Forms-F in question and as such neither any adverse inference c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... these Forms-F were received from the aforesaid two agents who are infact extended hands of the applicant i.e. the principal. No evidence has been submitted by the applicant at any stage of the proceeding to demonstrate that these Forms-F were obtained by the aforesaid agents from the Prescribed Authority. Thus, these forms were totally invalid forms and were nothing but a waste paper. He submits that the order of remand by the Tribunal cannot be said to be unjustified under the facts and circumstances of the case and the law laid down by this Court in the case of M/s Rajesh Trading Company, Ghaziabad Vs. Commissioner of Trade Tax, U.P. at Lucknow & Ors, 2006 NTN ( Vol-31)- 111. 11. I have carefully considered the submission of learned counsel for the parties. 12. It is undisputed that the aforesaid four Forms-F of Rs. 4,98,43,435/- were submitted by the applicant for taking benefit of Section 6A of the CST Act showing these to have been received from their agent M/s Rajdhani Traders, Delhi. Likewise, the aforesaid two Forms-F of value of Rs. 3,01,73,690/- were submitted to take benefit of Section 6A of the CST Act showing it to have been received from their agent M/s Radhika Ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceedings on the ground of discovery of new fact or revision by a higher authority on the ground that the findings of the assessing authority are contrary to law, and such reassessment or revision may be done in accordance with the provisions of general sales tax law of the State. 16. Sub-section (1) of Section 6A of the CST Act has used the words "Assessing Authority" and "Prescribed Authority". The word "Assessing Authority" has been defined in the explanation to Section 6A to mean that in relation to a dealer, the authority for the time being competent to assess the tax payable by the dealer under this Act. The word "Prescribed Authority" has been defined in Section 2(cc) of the Central Sales Tax ( Registration and Turnover) Rules , 1957 as under : - "(cc) 'prescribed authority' means the authority empowered by the Central Government under sub-section (2) of section 9, or the authority prescribed by a State Government under clause (e) of sub-section (4) of section 13, as the case may be;" 17. Clause (e) of sub-section (4) of Section 13 of the CST Act is a rule making power which provides as under : - "(e) the authority from whom, the conditions subject to which and fe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at every effort should be made to give effect to each and every word used by the legislature. Presumption is that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. A construction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting error. These principles are supported by the law laid down by Hon'ble Supreme Court in number of judgments including the constitution Bench judgment in the case of Nathi Devi Vs.Radha Devi Gupta JT 2005(1) SC 1 ( para 12 to 15). In view of these settled principles of law the words ' obtained from the prescribed authority' and the words 'such declaration' have to be given due meaning while understanding the provision of Section 6A of the CST Act. 21. Thus as per Scheme of Section 6A of the CST Act read with Rule 2(cc) and 12(5) of the Rules, one of the most crucial requirement to avail benefit of a Form-F is that such Form-F should be obtained by the transferee from the Prescribed Authority. This follows that it should be a validly obtained and not an invalid, illegal, forged....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... in favour of the revenue and against the assessee. 23. The view taken by me as above is also supported by the law laid down by Hon'ble Supreme Court in the case of Ashok Leyland Vs. State of T.N. and another reported in 2004 (3) SCC 1. In para 44 of the said judgement, Hon'ble Supreme Court held that declaration under Section 6 A of the Central Act would contain the prescribed particulars in the prescribed form obtained from the prescribed authority and alongwith the declaration, the dealer is required to furnish the evidence of dispatch of such goods by reason of Act 20 of 2002. If the dealer fails to furnish such declaration, by reason of legal fiction, the movement of goods would be deemed, for all purposes of the CST Act, to have been occasioned as a result of sale. The prescribed authority of the transferee State supplies the said form. The original of the said form is to be filed before the authorities of the transferor State and the duplicate thereof is to be filed before the authorities of the transferee State. Section 6A provides for exception as regard the burden of proof in the event a claim is made that transfer of goods had taken place otherwise than by way ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... agent or principal. Such declaration would contain the prescribed particulars in the prescribed form obtained from the prescribed authority. Along with such declaration, the dealer is required to furnish the evidence of such dispatch of goods by reason of Act 20 of 2002. In the event it fails to furnish such declaration, by reason of legal fiction, such movement of goods would be deemed for all purposes of the said Act to have occasioned as a result of sale. Such declaration, indisputably, is to be filed in Form F. The said form is to be filled in triplicate. The prescribed authority of the transferee State supplies the said form. The original of the said form is to be filed with the transferor State and the duplicate thereof is to be filed before the authorities of the transferee State whereas the counterfoil is to be preserved by the person where the agent or principal of the place of business of the company is situated. 72. A statute, as is well-known, must be interpreted having regard to the text and context thereof. Mischief Rule may also be applied in a given case. 73. While construing a statute, the object of the Act must be taken into consideration. (See Killick Nixon Lt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the legal fiction created would be a transaction otherwise than as a result of an inter-State sale. Furthermore, once such a legal fiction is drawn, the same would continue to have its effect not only while making an order of assessment in terms of the State Act but also for the purpose of invoking the power of reopening of assessment contained in Section 9(2) of the Central Act as well as Section 16 of the State Act. 100. In terms of Clause (3) of Article 269, inter-state sale is contrasted from local sale. 101. An order passed by the statutory authority who has jurisdiction therefore, the same would amount to a part of substantive and not procedural law. In addition to this there is no provision for appeal. Thus, it is only in the limited cases of fraud, mis-representation etc. that reassessment can be directed and not if there had been a mere error of judgment. 102. If it is not an inter-State sale provided through a legal fiction, then it amounts to transfer of stock and this is a finding which has been arrived at by a statutory authority where for there does not exist any provision for appeal. Therefore, it cannot be reopened on the premise that there was a mere error of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... moved merely from the branch office to the buyer..." 112. The purpose of verification of the declaration made in Form F, therefore, is as to whether the branch office acted merely as a conduit or the transaction took place independent to the agreement to sell entered into by and between the buyer and the registered office or the office of the company situated outside the State. The said decision therefore, does not run counter to our reading of the said provision. Furthermore, the question which has been, raised before us had not been raised therein. 113. We, therefore, are of the opinion that the observations made by this Court in Ashok leyland (supra) to the effect that an order passed under Sub-Section (2) of Section 6A can be subject matter of reopening of a proceeding under Section 16 of the State Act was not correct. 114. However, we may hasten to add that the same would not mean that even wherein such an order has been obtained by commission of fraud, collusion, misrepresentation or suppression of material facts or giving or furnishing false particulars, the order being vitiated in law would not come within the purview of the aforementioned principle. 115. An order of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Contract Act defines fraud as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact which he knows to be untrue yet he succeeds in misleading the represented by making him believe it to be true. The representation to become fraudulent must be of the fact with knowledge that it was false. In a leading English Case (Derry v. Peek (1886-90) All ER 1) what constitutes fraud was described thus: (ARR ER p. 22 B-C): Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false." 117. This aspect of the matter has been considered recently by this Court in Roshan Deen v. Preeti Lal : (2002)ILLJ465SC , Smt. Anita v. R. Rambilas : AIR2003AP32 , Ram Preeti Yadav v. U.P. Board of High School and Intermediate Educat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny of the purposes mentioned in form 'C' or whether the goods purchasing were in fact not used for the purposes declared in the certificate. M/s. Chuni Lal Parshadi Lal v. Commissioner of Sales Tax, [1986] SCC 501 followed the decision in State of Madras v. Radio and Electricals Ltd. (supra) and held that for the purpose of the U.P. Sales Tax Act, 1948, the Sales Tax Authorities could only look into the question whether the certificate was forged or fabricated and the Sales Tax Officer could not hold an enquiry whether the purchasing dealer, notwithstanding the declaration, was likely to use the goods purchased for purposes other than that mentioned in the Form 'C. If the certificate was valid and covered the goods purchased, the Court held that it raised an irrebuttable presumption that the goods would be used for the purposes mentioned, since the purpose of the rule was to make the object of the provision of the act workable which was realization of tax at one single point, i.e. at the point of sale to the consumer Similarly, declarations of value for the purposes of import or export duty under the Customers Act, 1902 fall within the first category. For example Jacks....