AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2014 (12) TMI 44
X X X X Extracts X X X X
X X X X Extracts X X X X
...."the CST Rules, 1957", for furnishing declaration as envisaged in section 6A(1) of the Central Sales Tax Act, 1956, hereinafter referred to as, "the CST Act, 1956", for movement of the goods to the other State/s. The genesis of the writ petition is rooted in the communication dated November 27, 2010, annexure P/4 to the writ petition, whereby the writ petitioner was informed that her firm was not entitled to get form F under the provision of the CST Act, 1956 and Rules made thereunder as the writ petitioner or her principal had not obtained certificate of registration separately under section 7(2) of the CST Act, 1956 read with rule 4(2) of the CST Rules, 1957. It was further stated in the communication that there was no bar to issue other statutory permits under the TVAT Act, 2004 or the CST Act, 1956 except form F for exigency of the business of the writ petitioner. The writ petitioner had filed a revision petition under section 70 of the Tripura Value Added Tax Act, 2004 (hereinafter referred to as, "the TVAT Act, 2004") and before disposal of the said revision petition, this court was approached under article 226 of the Constitution of India challenging the said action. Howe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t-in-opposition it surfaces that the principal/principals have no locus standi, according to the Revenue, to ask for form F from the writ petitioner as the transaction in question is not covered under section 6A(1) of the CST Act, 1956. Moreover, the principal is not registered under the TVAT Act, 2004 and the CST Act, 1956 in the State of Tripura. The writ petitioner challenged the legality of the said decision of the Revenue on the solitary ground that no inter-State sale has occasioned preceding the movement of the products in question. The principal namely, "Mahabir Chemicals" stated to be a registered dealer under the CST Act, 1956 vide Registration No. C.S.T. Gau/B/994 from the State of Assam, however, no record in this regard has been produced in the proceeding. But that status has not been disputed ever by the Revenue. The bone of contention rests on the nature of the inter-State transaction and for the purpose, the covenant containing the terms and conditions of the business was under the scanner. In the letter of appointment for appointing the writ petitioner as the consignment agent of "Mahabir Chemicals", hereinafter referred to as "the principal", as available at an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to evade the payment of CST of the State. It is not in dispute that the writ petitioner is a registered dealer under section 7(3) of the CST Act, 1956 as well as under section 19 of the TVAT Act, 2004 and the Rules made thereunder for carrying on the business from the registered premises. It is also not in dispute that the writ petitioner has been paying VAT for the sales relatable to the consignment imported to the State of Tripura by the said arrangement, but the writ petitioner does not pay the CST. Instead the writ petitioner sends form F to the principal for making the necessary declaration within the prescribed period to the concerned authority in the State of Assam. Mr. B.B. Das, learned counsel appearing for the Revenue-appellant quite emphatically submitted that the transaction between the principal and the writ petitioner cannot be termed as inter-State transfer of stock, rather it is an incidence of inter-State sale. While elaborating his submission, Mr. Das, learned counsel for the Revenue-appellant submitted that section 2(b) of the GST Act, 1956 defines "dealer" and section 2(f) of the CST Act, 1956 defines "registered dealer", meaning a dealer who is registered....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence of despatch of such goods (and if the dealer fails to furnish such declaration, then, the movement of such goods shall be deemed for all purpose of this Act to have been occasioned as a result of sale). (2) If the assessing authority is satisfied after making such inquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer under sub-section (1) are true, he may, at the time of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to that effect and thereupon the movement of goods to which the declaration relates shall be deemed for the purposes of this Act to have been occasioned otherwise than as a result of sale. Explanation.-In this section, 'assessing authority', in relation to a dealer, means the authority for the time being competent to assess the tax payable by the dealer under this Act." It is apparent that in the event of movement of goods occasioned from one State to another State by reason of transfer of such goods by the registered dealer to any other place of his business or to his agent or principal, as the case may be and not by reason of sale, the burde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Co. Ltd. as reported in [1960] 40 ITR 444 (SC); AIR 1960 SC 1294. The principle as laid down in S.K.F. Ball Bearing [1960] 40 ITR 444 (SC); AIR 1960 SC 1294 is that if the remittance is received before the sale takes place that is subject to adjustment to the accounts but that by itself cannot be deemed as sale, taken place where the principal carries on the business. The learned single judge, on considering the rival contentions held that the movement of the goods in question is not an inter-State sale but the transfer of goods from one State to another and as such refusal to issue form F to the writ petitioner for carrying on the transactions with the principal is unsustainable and accordingly, the learned single judge directed the Revenue-appellants to issue form F to the writ petitioner within fifteen days from the date of receipt of the order with condition that the petitioner shall fill in the said form F in the office of the said authority. The Supreme Court in Ashok Leyland Ltd. v. State of Tamil Nadu as reported in [2004] 134 STC 473 (SC); [2004] 3 SCC 1, held (pages 500-502 in 134 STC): "44. The liability to tax on inter-State sale as contained in section 6 is ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hey are not subjected to the provisions of the Central Sales Tax Act. It is not in dispute thereunder no appeal is provided thereagainst. 46. In Chunni Lal Parshadi Lal v. Commissioner of Sales Tax, U.P. [1986] 62 STC 112 (SC); [1986] 2 SCC 501, it was held (SCC pages 507-508, para 23-25) (page 118 in 62 STC): 'It means that a sale of any of the goods specified in sub-section (1) to a registered dealer who has purchased them or to any unregistered dealer, shall for the purpose of this section, be deemed to be a sale to the consumer unless the purchasing dealer purchases the said goods for resale in the same condition. It merely strengthens the provisions of sub-section (2) of section 3AA, i.e., unless the dealer proves otherwise, every sale shall, for the purpose of sub-section (1), be presumed to a consumer. The combined effect of sub-sections (1), (2) and (3) of section 3-AA of the Act is that tax would be payable if the goods in question, i.e., cotton yarn, in this case, are sold to a dealer for consumption. Unless the dealer proves otherwise every sale by a dealer shall for the purpose of sub-section (1) be presumed to be a sale to a consumer. A sale of any of the goo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ult of sale. (ii) Whenever such an order is passed, a legal fiction is created." The apex court in Ashok Leyland Ltd. [2004] 134 STC 473 (SC); [2004] 3 SCC 1 further enunciated as under (pages 508 and 509 in 134 STC): "74. Section 6A of the Act although provides for a burden of proof, the same has to be read in the context of section 6 of the said Act. Section 6 provides for liability to pay tax on inter-State sales. Any transaction which does not fall within the definition of 'sale' would not be exigible to tax, the burden whereof would evidently be on the assessee. We have noticed hereinbefore that whereas prior to the amendment in sub-section (1) of section 6A the dealer had an option of filing a declaration in form F; after such amendment, he does not have such option, insofar as in terms of the amended provision, if the dealer fails and/or neglects to file such a declaration, the transaction would be deemed to be an inter-State sale. It is to be noticed that for the aforementioned purpose also, the Parliament advisedly used the expression 'deemed'. If the expression 'deemed' is interpreted differently, an incongruity would ensue. 75. In abse....