AI Drafter 
TaxTMI 
TaxTMI 
2019 (1) TMI 896
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....s at Chennai. In the year 1995-96, the appellant returned total and taxable turnover of Rs. 2,94,04,692/- and Rs. 20,66,389/- respectively under the Central Sales Tax Act, 1956 ("the CST Act" for short). In the year 1996-97, the appellant returned total and taxable turnover of Rs. 99,20,097/- and Rs. 30,228/- respectively under the CST Act. In both the years, the appellant claimed deduction towards consignment sales. On 23.06.1995, the appellant's place of business was inspected. After perusing the records pertaining to consignment transfer to agents in other States, it was found that exemption on consignment sales was wrongly claimed. The Assessing Officer proposed to reject the exemption claimed on consignment sales for Rs. 2,64,14,976/- and to treat those transactions as direct inter-state sales liable to be taxed @ 8% along with penalty under Section 9(2A) of the CST Act read with Section 12(3) of Tamil Nadu General Sales Tax Act, 1959 ("TNGST Act" for short). After calling for the objections and after considering the same, the Assessing Officer rejected the exemption claimed on consignment sales and levied tax and penalty as per the proposal vide the order dated 25.05.2001.....
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.... has effected consignment sales only through a single agent Bhuwalka Trade Links (P) Limited, Bangalore. The Tribunal has further noted that from the consignment notes available in assessment files for both years, it is seen that the goods were consigned not only to the agent Bhuwalka Trade Links (P) Limited, Bangalore but also to Bhuwalka Steel Industries, Bangalore with the mention that freight to be billed at Madras. The record makes it evident that Bhuwalka Steel Industries is the sister concern of the agent Bhuwalka Trade Links (P) Limited and that the goods were moved from the appellant straight to Bhuwalka Steel Industries, but claim of consignment sales through Bhuwalka Trade Links (P) Limited was made. The Tribunal has in the circumstances held that the Assessing Officer's view is correct as regards agent Bhuwalka Trade Links (P) Limited for both years. However, with regard to other agents, there is no clinching evidence to corroborate the findings of inspection that the transactions were inter-state sales. The Tribunal, therefore, confirmed the findings of the Appellate Assistant Commissioner (CT) i.e. respondent no. 3 in allowing deductions on consignment sales to other ....
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....ption on that score. The respondent has to prove a conceivable link between the movement of goods and the implied contract, which the respondent has failed to do. Counsel submitted that the Appellant had filed Form F declarations obtained from its agent and also filed evidences of dispatches and had thereby discharged its burden. The scope of the enquiry of the Assessing Officer is restricted to finding out whether the particulars contained in Form F declarations are correct or not. Counsel submitted that merely because the goods were sold on the same date of arrival or two or three days after receipt of the goods at branch office that by itself will not take away the character of branch transfer. In this connection, Counsel relied on several judgments which reiterate the same proposition. Suffice it to refer to the judgments of the Madras High Court in State of Tamil Nadu v. P.M.P. Iron and Steel India Ltd. 28 VST 370 and State of Tamil Nadu versus Coimbatore Pioneer Rolling Mills & Another 30 VST 524. Counsel submitted that the goods were standardized goods. They were not manufactured to the specification of any buyer. There was no compulsion to deliver them to a particular buyer....
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....e in fact inter-state sales. The reopening of concluded assessment done in this case is therefore illegal. So far as the remand order passed by the Tribunal is concerned, Counsel placed reliance on judgment of the learned Single Judge of the Madras High Court in Ashoka Sweets v. State of Tamil Nadu [2011] 46 VST 275 (Mad) where a request for remand was turned down on the ground of lapse of time. Counsel submitted that in the circumstances the impugned order deserves to be set aside and may be set aside. Mr. K.V. Vijayakumar learned Counsel for the State of Tamil Nadu supported the impugned order. Counsel submitted that the impugned order merely remands the matter and hence no interference is necessary with it. Counsel submitted that the material which came to light during inspection indicated that Bhuwalka Steel Industries, Bangalore is a sister concern of Bhuwalka Trade Links (P) Limited. The goods were delivered directly to Bhuwalka Steel Industries. Bhuwalka Trade Links (P) Limited was merely a conduit. Counsel submitted that reassessment proceedings were initiated only when inspection revealed that inter-state sales were camouflaged as consignment sales. Such re-opening o....
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.... from the appellant straight to Bhuwalka Steel Industries but claim of consignment sales through agent - Bhuwalka Trade Links (P) Limited was made. The Tribunal found that Bhuwalka Trade Links (P) Limited was merely a conduit and in the circumstances came to a conclusion that the transactions of the appellant with Bhuwalka Trade Links (P) Limited where goods had directly gone to Bhuwalka Steel Industries were inter-state sales. In the circumstances, the Tribunal confirmed the findings of the Appellate Assistant Commissioner (CT) i.e. respondent no. 3 herein, whereby respondent no. 3 had allowed deduction on consignment sales made by the appellant to other agents in the year 1995-96. On this aspect it concurred with respondent no. 3 that there was no clinching evidence to corroborate the findings of inspection that the said transactions were inter-state sales. The order of respondent no. 3 allowing deduction on consignment sales made to the agent Bhuwalka Trade Links (P) Limited was set aside for the year 1995-96 and 1996-97. Thus the Tribunal found that the appellant's transactions with Bhuwalka Trade Links (P) Limited were suspect. The claim of the appellant for deduction regardin....
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....he matter in all fairness it should be treated as tentative or prima facie view. So far as reopening of assessment is concerned, it is true that in Ashok Leyland, the Supreme Court has held that reopening of the assessment can be done on the limited grounds such as fraud, misrepresentation, collusion etc. In this connection, it is necessary to have a look at the notice dated 14.05.1999 sent by the Assessing Officer to the appellant proposing revision of the assessment for the year 1996-97. Following paragraph of the said notice is material: "The consignments have not been moved in the ordinary course of business as stock transfer from the State of Tamil Nadu to the State of Karnataka. The consignments have been moved against specific orders for specific quantities under pre-existing contract of sale as decided in the case of Tvl. Haryana Iron and Steel Rollings Mills verses State of Haryana and in the case of Tvl. Mehta Corpn. Industries versus State of Haryana. The movements of the goods have been occasioned as an incidence of contract of sales already entered into with the buyer at the other end and thereby the Inter-state sale under section 3(a) of the CST Act has be....