TaxTMI 
TaxTMI 
2019 (2) TMI 128
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....e State of Jharkhand. Admittedly, the appellant is registered under the provisions of the Maharashtra Value Added Tax Act, 2002 ("MVAT Act"), and also under the Central Sales Tax Act, 1956 ("CST Act"). Officers of the Business Audit wing of the Sales Tax Department carried out business audit of the business transactions of the appellant between 06.05.2008 and 08.05.2008. Transactions for the period between 2006-07 and 2007-08 were audited. The findings of the Business Audit unit were communicated to the appellant by letter dated 23.06.2009. The appellant was directed to revise its returns. The appellant did not file revised returns. The appellant did not file its say. The Deputy Commissioner of Sales Tax (LTU-10), Mumbai initiated assessment proceedings by issuing notice in Form 'VI-B' under the CST Act for the period between 2006-07 and 2007-08. Through its senior executives the appellant produced its books of accounts, bills, declarations, dispatch proofs etc. in support of its claim of branch transfer. Show cause notices dated 18.12.2009 were issued to the appellant, calling upon the appellant to show cause as to why its claim of stock transfer to its own branch should ....
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....e period 200607 the Assessing Authority has solely relied on the purchase order dated 26.04.2006. Except this purchase order there is no evidence in this case to show that there are back-to-back sales of the goods dispatched from Maharashtra and goods sold by the branch at Jamshedpur. Counsel contended that as per purchase order dated 26.04.2006, certain quantity of goods was ordered to be delivered on 26.04.2006 itself. There was sufficient stock lying with the branch as on 26.04.2006 which was received earlier to comply with the order of M/s Tata Steel Ltd. ("Tata Steel" for short). Therefore goods sold to Tata Steel in pursuance of the delivery schedule mentioned in the purchase order ought to be out of the stock. It cannot therefore be concluded that movement of goods from Maharashtra to the branch is occasioned as a result of the purchase order dated 26.04.2006. Counsel submitted that the purchase order contains conditions to which it is made subject to. Condition No. (2) is that supply to Ring Plant (Tata Steel Works) from Jamshedpur through CA on month-to-month basis as per their indents only and Condition No. (3) is that the CA must have facility to maintain one month inven....
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....h transfer for the year 2007-08. In any case during the period 2007-08 the appellant had sold goods worth Rs. 23,87,389/- to Tata Steel. Counsel submitted that therefore assuming the worst against the appellant the disallowance could only be to the extent of Rs. 23,87,389/- and not entire claim of Rs. 32,24,63,898/-. Counsel submitted that tax levied on goods worth Rs. 32,00,76,509/- for which there is no purchase order is therefore wholly without jurisdiction. Counsel relied on M/s Jute Corporation of India Ltd. versus Commissioner of Income Tax and Another 1991 AIR 241 (SC) in support of his submission that the appellant was entitled to raise additional grounds in this appeal. Counsel also relied upon Tata Engineering and Locomotive Co. Ltd. versus Assistant Commissioner of Commercial Taxes 26 Sales Tax Cases 354 (SC) to contend that the Assessing Authority was bound to examine each individual transaction and then decide whether it constituted an inter-State sale exigible to tax under the provisions of the CST Act. Counsel submitted that the onus lies on the Department to dispute the contention of the assessee that it was an inter-State sale. In this connection, Counsel relied....
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....appellant and corresponding sale bills of the branch are same and the goods sent from Khopoli plant of the appellant are directly delivered to the customers of the branch. Counsel submitted that after going through the invoices raised by the Jamshedpur Branch to ultimate buyer i.e. M/s Omni Auto Limited, it is seen that goods of same quantity and quality were delivered by the same vehicle to the ultimate buyer. Counsel submitted that it is true that the purchase order dated 26.04.2006 is for supply of goods worth Rs. 12,96,54,243.94 and it is for the period 2006-07. It is also true that the Assessing Authority has disallowed the entire branch transfer claim of Rs. 37,19,60,952/-. Counsel submitted that there is no illegality in this. Counsel submitted that at the time of assessment for the year 2006-07 branch transfer claim for full year was verified. Considering the nature of transaction, modus operandi of the appellant and the pre-existing purchase order of Tata Steel the total claim of branch transfer was disallowed. Counsel further submitted that even though in case of M/s Omni Auto Limited the proof of back-to-back sale is for March 2008, sale is effected to M/s Om....
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....d be appropriate first to deal with the assessment proceedings in respect of year 2006-07. Show cause notice dated 18.12.2009 in respect of year 2006-07 stated that the appellant's claim of stock transfer of goods worth Rs. 37,19,60,952/- to its agent at Jamshedpur appears to be not sustainable, inter alia, because of the nature of the purchase order dated 26.04.2006 produced by the appellant. It further stated that the said purchase order was received by the appellant's Jamshedpur branch from Tata Steel for the goods worth Rs. 12,96,54,243/-. In this purchase order Tata Steel has given the details of delivery date, quantity and specifications of the goods, delivery point etc. The delivery dates are from 26.04.2006 to 28.03.2007. This makes it clear that Tata Steel had placed order for the year 2006-07 on 26.04.2006. The notice, further, stated that the purchase order has been addressed in the appellant's name C/o branch office. In the sale bills raised by the branch on Tata Steel, the purchase order details have been mentioned which indicates that the sales have been effected in pursuance of purchase order dated 26.04.2006. The notice, further, stated that ....
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....cifications of goods (Steel Rods), delivery point etc. The delivery dates are from 26.4.2006 to 28.3.2007. It means that the customer has placed order for the year 2006-07 on 26.4.2006. b) The P.O. has been addressed in the name of dealer c/o the branch office. c) The terms and conditions mentioned in the P.O. are as follows: i) (Condition no.1) The price shall be firm and valid for the entire quantity of order. ii) (Condition no. 2) Supply to Ring plant (Tata Steel Works) from Jamshedpur, through CA on month to m nth basis as per indents only. iii) (Condition no. 3) CA must have facility to minimum one month delivery. iv) Condition no. 11) Material should confirm to our TDC and M/s Timken's corporate standard vide 3.1.23 Rev. Dated 16.5.2006. d) From the condition no. (1) and (2) it is clear that the customer has placed order on the dealer through the Branch. The customer has instructed to supply steel to Ring plant at Jamshedpur through the branch. e) On the sale bills raised by the branch, M/s Tata Steel Ltd. (the customer), the purchase order details have been mentioned. From the sale bills it is clear that....
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....cal statement in the assessment order that as per Section 6A(2) of the CST Act the books of accounts and other documents have been verified to ascertain the nature of transactions. It is stated that after verification, the above observations have been made and therefore in spite of production of Form F declarations the claim of branch transfer is not allowable. Thus it is evident that the Assessing Authority has made necessary inquiry. It has verified the documents and rejected F Form declarations and other evidence. Requirement of law is therefore satisfied. It is not possible to accept the contention that the purchase order dated 26.04.2006 is only tentative requirement of the year to be followed by monthly indents and monthly indents can be treated as confirmed orders. The transactions have all the attributes of inter-State sale. This is clear from the purchase order. In this connection, reliance placed by the Tribunal on the judgement of the Supreme Court in M/s Hyderabad Engineering Industries versus State of Andhra Pradesh Civil Appeal No. 3/81 of 2003 is apt. The relevant paragraphs need to be quoted "32. From the above decisions, the principle which emerge is wh....
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....rejected the entire claim of stock transfer of Rs. 37,19,60,952/- when admittedly it has relied on purchase order dated 26.04.2006 received from Tata Steel which is only for the goods worth Rs. 12,96,54,243/-. For the rest of the amount of Rs. 24,23,06,709/- there is no purchase order on record. No other documents or material has been discussed by the Assessing Authority to come to a conclusion that the stock transfer claim in respect of goods worth Rs. 24,23,06,709/- is liable to be rejected. Neither in the show cause notice nor in the assessment order the Assessing Authority has made any specific reference to any other buyers. In the show cause notice a vague statement is made that it is found that the Jamshedpur branch has effected sales only to 3 buyers during 2006-07 and the above facts are applicable to other buyers also. Names of the buyers are not stated. How the findings based on purchase order dated 26.04.2006 are applicable to these buyers is not stated. Again in the assessment order the same vague statement is made. From the contentions of the appellant recorded in the assessment order, it is clear that the appellant's stand was that it had submitted details only ....
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....holly wrong to follow and the Assistant Commissioner, on whom the duty lay of assessing the tax in accordance with law, was bound to examine each individual transaction and then decide whether it constituted an inter-State sale exigible to tax under the provisions of the Act." Thus, the Assessing Authority should have examined the appellant's transactions with other buyers individually. It should have discussed those transactions. It could not have referred to the purchase order of Tata Steel and made a vague statement that the facts discovered by it about transactions with Tata Steel are applicable to the other buyers and that too without even naming those other buyers. If with respect to those transactions similar purchase orders were not available it was all the more necessary to discuss other available evidence. There should have been clarity on this aspect. Unfortunately, the Tribunal has not noticed this infirmity. In the circumstances so far as year 2006-07 is concerned, the disallowance of stock transfer claim of Rs. 12,96,54,243/- will have to be confirmed. Disallowance of stock transfer claim of Rs. 24,23,06,709/ will have to set aside and to that extent the m....
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....show cause notice specifically states that all the goods despatched to the branch during March, 2008 have been sold only to one purchaser, namely, M/s Omni Auto Limited and that quantity of goods as per each of the consignment notes and quantity of goods as per each corresponding invoice raised by the branch is same, the Assessment Order dated 31.05.2010 passed pursuant to it does not even refer to M/s Omni Auto Limited. The contentions of the appellant recorded in the Assessment Order dated 31.05.2010 in respect of year 2006-07 have been bodily lifted and quoted in the Assessment Order for the year 2007-08. The Assessing Authority has given reasons for not accepting the contentions of the appellant. Following is relevant extract from the Assessment Order: a) For the month of March 2008 it is found that the vehicle number mentioned on the consignment notes raised by the dealer and corresponding sale bills of the branch are same. It is found that the goods sent from Khopoli plant of the dealer are directly delivered to the customers of the branch in the month of March 2008. So the claim of Branch Transfer to Jamshedpur Branch for the month of March 2008 is not allowable. ....
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.... it is the case of the Revenue that the appellant was asked to produce the purchase order for the year 2007-08, but the appellant did not produce any purchase order. The appellant should have produced purchase orders if they were in existence. But for that reason the Assessing Authority could not have used purchase order of Tata Steel to come to a conclusion that the branch transfer claim made by the appellant deserves to be rejected. Assessment order for the year 2007-08 reproduces all the averments made in assessment order for the year 2006-07 about Tata Steel purchase order. All the conditions mentioned in Tata Steel purchase order have been used to negative the branch transfer claim of the appellant in respect of transactions with M/s Omni Auto Ltd. Admittedly for these transactions there is no purchase order on record. If the appellant has not produced any purchase orders, as directed, the Assessing Authority should have discussed the appellant's transactions with M/s Omni Auto Ltd. more in detail. It should not have made general statements. Without even referring to M/s Omni Auto Ltd., the Assessing Authority has stated that it has considered the dispatch proof, consign....