2015 (10) TMI 225

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....ature of bulk sales. The sales tax authorities found that the rates fixed for sales to the airliner was much lower than the market value of sales made by the petitioner at his restaurant, therefore disagreed with the rates shown for the sales made to the airliner as undervalued and with reference to the prices at which the articles sold at the restaurant is considered for assessment and also found that there is wilful evasion of tax and levied a maximum penalty. The petitioner aggrieved by the said order (at annexure G) filed this petition. 2. The provisions of section 2(44) of the Assam Value Added Tax Act, 2003, hereinafter referred to as the AVATAct, defines the "sale price" in the following manner: "'sale price' means the amou....

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....ing heard." 4. The counsel for the petitioner relied on the decision of a Division Bench of the Andhra Pradesh High Court in Delux Wines v. State of Andhra Pradesh reported in [1990] 77 STC 373 (AP), where the Andhra Pradesh High Court made the following observation (pages 388 and 389 in 77 STC): "Let us therefore, examine the scope and ambit of section 2(1)(s) (ii) and section 14B(1) of the Act as incorporated by the Amendment Act 18 of 1985. Section 14B(1) of the Act enacts that it shall be open to the assessing authority to determine the turnover to the best of his judgment if the assessee shows in his account sales or purchases of any goods at prices which are abnormally low when compared to the prevailing market prices of the goods. ....

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.... to inevitably sell his products only at the alleged market rates as determined by the assessing authority as otherwise, the dealer would be not only liable to pay sales tax on the difference of turnover from out of his pocket, but also would stand exposed to penalty under section 14B(2) of the Act. Is there any legislative sanction for such a course ? It should be borne in mind that the Act can only make such incidental or ancillary provisions to effectuate the levy and collection of sales tax. Section 2(1)(s)(ii) of the Act, if construed as enabling the assessing authority to estimate the turnover even in a case where a dealer who collected sale price as mentioned in the bill of sale, would become ultra vires of the Legislature. As alread....

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....nsideration received by the dealer as the market price was determined by the prescribed manner. 7. In the instant case, the sales made are a bulk sale and the market is a competitive market. Merely because the sales made to the Sahara Airlines is much lower price than the price at which it is sold at the restaurant is not a ground in itself that the price is undervalued. The contract is a written contract and the amounts received are also assessable to income-tax. Both, the petitioner and the Sahara Airlines are income-tax assessees and the payments are made by cheques. In that view of the matter the view taken by the assessing authority that the sale price is undervalued and that assessing the goods at the market value is untenable. Accor....