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TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1046
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....e KGST Act whereby the Commissioner had set aside appellate order of the Deputy Commissioner dated 8.1.2002 and had restored the order of the Intelligence Officer. 2. The undisputed facts disclose that the respondent is in the business of purchase and sale of Hyundai cars manufactured by Hyundai Motors Limited, Chennai. As a dealer of said cars, both at Kozhikode (Calicut), Kerala where their head office is located and also at Mahe within the Union Territory of Pondicherry where they have a branch office, they are registered dealer and an assessee under the KGST Act, the Pondicherry Sales Tax Act as well as the Central Sales Tax Act. The dispute relates to assessment year 1999-2000. Its genesis is ingrained in the inspection of head office of the respondent on 1.6.2000 by the Intelligence Officer, IB, Kozhikode. After obtaining office copies of the sale invoices of M/s K.T.C. Automobiles, Mahe (branch office) for the relevant period as well as some additional period and also cash receipt books, cash book etc. maintained in the head office, he issued a show cause notice dated 10.8.2000 proposing to levy Rs. 1 crore by way of penalty under Section 45A by the KGST Act on the alleged ....
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....means such as providing incorrect addresses of buyers for the purpose of facilitating registration of the motor vehicles at Mahe. According to Mr. Radhkrishnan, the sales transactions stood concluded in Kozhikode, Kerala and hence the respondent should not have given any facilities to residents of Kerala in getting motor vehicles registered at Mahe. By adoption of such means, the respondent had derived advantage of paying sales tax in Pondicherry where the rate was lower and evaded payment of lawful tax under the KGST Act in Kerala. 5. To elaborate and support the aforesaid factual stance, the learned senior counsel has highlighted some facts which have been duly noticed by the authorities under the KGST Act as well as the High Court. He highlighted that in the "customer booking registration and necessary fitting instructions" issued from main office at Kozhikode the respondent gave an unwarranted option to the customers of registering the vehicle at Mahe. It was contended on behalf of appellant that such option was not for lawful purposes of promoting sales at Mahe but an offer to facilitate registration of cars at Mahe against the provisions of Motor Vehicles Act and the Rules w....
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....ay be prescribed by the Central Government. Section 41 also points to the same position as it enjoins an application on behalf of the owner of a motor vehicle for its registration. The question of issuing a certificate of registration and assigning it a registration mark arises only after sale of a motor vehicle. Therefore, until the motor vehicle has been sold to a person by a dealer, the registering authority would not come into the picture and there is no occasion for assigning it a registration mark....." 7. The aforesaid issue need not detain us any further in view of cited judgments and combined reading of Section 39 and 41 of the Motor Vehicles Act, 1988. Section 41 in particular leaves no manner of doubt that application for registration of a motor vehicle is required to be made by or on behalf of the owner in the prescribed form along with prescribed fee within a specified period. The registering authority after being satisfied with all statutory compliances, has a corresponding duty to issue a certificate of registration in the form prescribed by the Central Government. But even after accepting the proposition that registration of a motor vehicle is a post-sale event, t....
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....end 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. Section 20 - Specific goods in a deliverable state Where there is an unconditional contract for the sale of specific goods in a 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 the goods, or both, is postponed." 8. Before evaluating the impact of aforesaid legal provisions relied upon on behalf of the appellant, it would be appropriate to notice the arguments advanced and the stand adopted by Mr. K. Prasaran, learned senior advocate for the respondent. According to him, the situs of first sale of a motor vehicle by a dealer is only at the place of registration of the vehicle by the authority empowered to register motor vehicles u....
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....ugh specification of the engine and chassis numbers, it was always open to the company to "allot any vehicle to any purchaser or to transfer the vehicles from the stockyard in one State to a stock-yard in another State."" (emphasis supplied) 9. According to the respondent the fact that the vehicles in question were registered at Mahe, irrefutably leads to the conclusion of their being produced before the Registering Authority at Mahe prior to registration, as per requirement of Section 44 of the Motor Vehicles Act. It was pointed out that Chapter III of the Central Motor Vehicles Rules deals with registration of motor vehicles and as per Rule 33, a dealer is exempted from the necessity of registration even though in possession of a motor vehicle, if it obtains a Trade Certificate from the Registering Authority of the area where he carries on his business. Form 16 under Rule 34 is a form of application for grant or renewal of Trade Certificate whereas Form 17 contains the form of Trade Certificate. These forms show that only general information as to class of motor vehicle is noted for the purpose of Trade Certificate and not specific particulars of any vehicle such as engine n....
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....rming the findings of the Appellate Authority, the Deputy Commissioner need no interference by this Court. According to the respondent, the Deputy Commissioner and the High Court have come to a concurrent finding that the materials do not lead to any conclusive proof that the vehicles in question had been sold at Kozhikode in Kerala. According to both the authorities, the materials, at best, raise only some suspicion which can never take the place of proof which is necessary for imposition of penalty upon the assessee. 13. From the above submissions and counter submissions of the parties as well as relevant statutory provisions in the Motor Vehicles Act, 1988, Central Motor Vehicles Rules, 1989, Section 4(ii) of Central Sales Tax Act, 1956, Sections 4, 19 and 20 of the Sales of Goods Act and relevant provisions of the KGST Act and Rules noticed earlier, we find no difficulty in accepting the submissions advanced on behalf of the appellant that the application of registration is by law required to be made by or on behalf of the owner whose name is to be mentioned in the registration form along with relevant particulars of the vehicle such as engine number and chassis number and hen....
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....the right to use the vehicle at public places, after meeting the other statutory obligations of Insurance etc. Hence, technically though the registration of a motor vehicle is a post-sale event, the event of sale is closely linked in time with the event of registration. Neither the manufacturer nor the dealer of a motor vehicle can permit the intended purchaser having an agreement of sale to use the motor vehicle even for taking it to the registration office in view of the statutory provisions already noticed. Hence lawful possession with the right of use is permissible to be given to the intended owner only after reaching the vehicle to the office of Registering Authority. Thus seen, in practical terms though sale precedes the event of registration, in normal circumstances and as the law stands, it is co-terminus with registration of a new motor vehicle. 15. Article 286(2) of the Constitution of India empowers the Parliament to formulate by making law, the principles for determining when a sale or purchase of goods takes place in the context of clause (1). As per Section 4(2) of the Central Sales Tax Act, in the case of specific or ascertained goods the sale or purchase is deemed....
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....stion could come into the category of ascertained goods and could get appropriated to the contract of sale at the registration office at Mahe where admittedly all were registered in accordance with Motor Vehicles Act and Rules. The aforesaid view, in the context of motor vehicles gets support from sub-section (4) of Section 4 of the Sale of Goods Act. It contemplates that an agreement to sell fructifies and becomes a sale when the conditions are fulfilled subject to which the properties of the goods is to be transferred. In case of motor vehicles the possession can be handed over, as noticed earlier, only at or near the office of registering authority, normally at the time of registration. In case there is a major accident when the dealer is taking the motor vehicle to the registration office and vehicle can no longer be ascertained or declared fit for registration, clearly the conditions for transfer of property in the goods do not get satisfied or fulfilled. Section 18 of the Sale of Goods Act postulates that when a contract for sale is in respect of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained. Even when the ....