TaxTMI 
TaxTMI 
2024 (4) TMI 467
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.... and branches at Ahmedabad, Delhi, Coimbatore, Bangalore, Chennai, Cochin, Hyderabad and Visakhapatnam. 3. The assessing officer initiated assessment proceedings against the respondent by issuing a notice in Form VII B for the period from 01.04.2005 to 31.03.2006 under the Central Sales Tax Act, 1956 [the CST Act] in respect of the goods that had moved from the manufacturing unit at Navi Mumbai to the branches in other States and an assessment order was passed on 29.02.2012 raising a demand of Rs. 94,25,134/- for the reason that the claim of the respondent that it was a case of branch transfer was not correct. In arriving at a conclusion that the movement of the goods from the factory of the respondent at Navi Mumbai to the branches at Ahmedabad, Delhi, Coimbatore, Bangalore, Chennai, Cochin, Hyderabad and Visakhapatnam was as a result of pre existing orders placed by the customers at the branch offices, the Deputy Commissioner relied upon a decision of the Customs, Excise and Service Tax Appellate Tribunal, Mumbai [CESTAT] dated 05.08.2005 in the case of the respondent itself in Beardsell Ltd. vs. Commissioner of Central Excise, Belapur [2006(193) E.L.T. 325 (TRI.-MUMBAI)]. The....
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....helters, cold storage, portable cabins, warehouse etc. approach the branch offices. The site engineers visit the site and understand the specifications and requirements of the customers. The customer places an order on the dealer specifying the dimensions of the building required by them. Thereafter, the engineers of the dealer prepare detailed specifications for the whole building in terms of length, width and height of the structure (such as the walls, roofs, floors, windows, doors) and number of panels required etc. The engineers thereafter place dispatch instructions to the factory. It is therefore crystal clear from the dealer's own submission before the Hon'ble Tribunal that the branch transfers are affected as a result of preexisting orders placed by the customers with the branch offices. What has been submitted as well as admitted by the dealer before the Hon'ble Tribunal need not be proved by the department and therefore the burden of proof in this regard does not lie on the department. During verification of the branch transfer invoices and transport receipts produced by the dealer in support of the branch transfer claim it is observed that certain goods which are shown t....
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...., Guntur vs. P.M.G. Structurals Pvt. Ltd. 2010 (250) E.L.T. 113 (Tribunal Bangalore) Counsel for the appellant has pointed out that interstate sales were determined at Rs. 8,05,65,192/-, for which tax was collected and paid. It was pointed out that branch transfers to offices outside the State of Maharashtra was shown at Rs. 2,09,60,154/-. Therefore, the dispute is only with regard to this amount of Rs. 2,09,60,154/-. Appellant has contended that each and every transactions are required to be looked into as per the Supreme Court judgment in the case of Tata Engineering and Locomotive Ltd. vs. Assistant Commissioner of Commercial Tax reported in (1970) 26 STC 354. ***** Hence, he contended that assessing authority has to examine each and every transaction. However, assessing authority looked into three transactions worth Rs. 53,21,459/- and applied the ratio to all the other transfers. It was, therefore, contended that the burden of proof was on the State and therefore each transaction was required to be looked into. There is substance in the argument. 14. As appellant has filed 'F' Form, there is presumption raised. Therefore, the State has to prove that ....
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....dent. Learned counsel submitted that the respondent cannot be permitted to take a different stand on the same issue before different authorities. In this connection, learned counsel placed reliance upon the decision of the Madras High Court in Yousuff Radio vs. The Board of Revenue, Commercial Taxes, Chepauk, Madras-5 [(1979) 43 STC 525]. To support the contention that the movement of the goods from the State of Maharashtra to other State was occasioned because of pre-existing orders, learned counsel placed reliance upon the decisions of the Supreme Court in Ashok Leyland Ltd. vs. State of T.N. and another [(2004) 3 SCC] and Hyderabad Engineering Industries vs. State of Andhra Pradesh [(2011) 4 SCC 705]. 8. Shri N.V. Tapare, learned counsel for the respondent, assisted by Sandeep D. Ghaterao, however, supported the impugned order and submitted that it does not call for any interference. Learned counsel submitted that the Deputy Commissioner was not justified in placing reliance upon the decision dated 05.08.2005 of CESTAT to reject the claim of branch transfer of Rs. 2,09,60,154/- and on the other hand MSTT has given good and cogent reasons for accepting the claim of the respond....
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....h goods by him 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 burden of proving that the movement of those goods was so occasioned shall be on that dealer and for this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business, or his agent or principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority, along with the evidence 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 purposes 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 ....
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....tral Act to prove that the movement of goods was occasioned not by reason of sale but otherwise than by way of sale. When the department does not take advantage of the presumption under Section 3(a) of the Central Act, but shows a positive case of inter-State sale in the course of inter-State trade or commerce to make it liable to tax under Section 6, the declaration in Form 'F' under section 6A would be of no avail. 23. It is an accepted position in law that a mere transfer of goods from a head office to a branch office or an inter-branch transfer of goods, which are broadly brought under the phrase 'Branch transfers' cannot be regarded as sales in the course of inter-State trade, for the simple reason that a head office or branch cannot be treated as having traded with itself or sold articles to itself by means of these stock transfers. 24. In the instant case, the case of the Revenue is not only based on the agreement of sale but also on the presumption under Section 3(a) of the Central Act. 25. In the instant case, the assessing authority and the Tribunal have recorded a finding of fact that there were prior contracts between Usha Sales Ltd. and the a....
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....om a head office to a branch office or inter-branch transfer of goods which broadly come under the phrase 'branch transfers' cannot be regarded as sale in the course of inter-State trade for the simple reason that a head office or branch cannot be treated as having traded with itself or sold articles to itself by means of stock transfers. A contract of sale of goods would be effective when a seller agrees to transfer the property in goods to the buyer for a price and that such a contract may be either absolute or conditional. If the transfer is in presenti, it is called a 'sale'; but if the transfer is to take place at a future time and subject to some conditions to be fulfilled subsequently, the contract is called 'an agreement to sell'. When the time in the agreement to sell lapses or the conditions therein subject to which the property in goods is to be transferred are fulfilled, the 'agreement to sell' becomes a 'sale'. When the 'sale' or 'agreement to sell' causes or has the effect of occasioning the movement of goods from one State to another, irrespective of whether the movement of goods is provided for in the contract of sale or not, or whether the order is placed with any ....
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.... of business or his agent or principal. Such declaration would contain the prescribed particulars in the prescribed form obtained from the prescribed authority. Along with such declaration, the dealer is required to furnish the evidence of such dispatch of goods by reason of Act 20 of 2002. In the event, if it fails to furnish such declaration, by reason of legal fiction, such movement of goods would be deemed for all purposes of the said Act to have occasioned as a result of sale. Such declaration indisputably is to be filed in Form F. ***** 45. When the dealer furnishes the original of Form F to its assessing authority, an enquiry is required to be held. Such enquiry is held by the assessing authority himself. He may pass an order on such declaration before the assessment or along with the assessment. Once an order in terms of Sub-Section 2 of Section 6-A of Central Act is passed, the transactions involved therein would go out of the purview of the Central Act. In other words, in relation to such transactions, a finding is arrived at that they are not subjected to the provisions of the Central Sales Tax. It is not in dispute thereunder no appeal is provided there against....
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....ving examined the relevant provisions of the CST Act, it would now be appropriate to refer to the facts of the present appeal. 16. The respondent is a manufacturing unit at Navi Mumbai in the State of Maharashtra and has branches at Ahmedabad, Delhi, Coimbatore, Bangalore, Chennai, Cochin, Hyderabad and Visakhapatnam. The issue that arises for consideration is whether the movement of the goods from the factory of the respondent at Navi Mumbai to its branches in other States was as a result of pre-existing orders placed by the customers at the branch offices of the respondent or was merely a branch transfer as claimed by the respondent. The assessing officer, in the order dated 29.02.2012, relied upon the decision dated 05.08.2005 rendered by CESTAT in the case of the respondent wherein a finding was recorded that the movement of goods from the factory at Navi Mumbai to the branches of the respondent in other States was as a result of pre-existing orders placed by the customers at the branch offices. The assessing officer held that it was not open to the respondent to take one plea before CESTAT and a contrary plea before the authority. The assessing officer, therefore, concluded....
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....s recorded as - ***** (f) All structurals panels : (i) Are made with uniform width of 1.18 metres (dimensions of shelters, garages etc. are generally designed with multiples of 1.18 metres as width); and (ii) Thickness varies between 50 mm to 300 mm; and (iii) Are supplied in exact numbers with predetermined dimensions for assembly of them together into walls, ceiling, floors, etc. with the channels (of the same materials as of the panels) supplied along with the panels; and (iv) Not altered to any other size at the site. 2.3 (a) Details of correct dimensions of panels, roofing, flashing etc. required for assembly of buildings at site by the appellants engineers at site determined. Panels are made of the predetermined thickness and length and in numbers in the machine itself. The required roof panels are also made ready in the machine. The doors and windows, wherever required are made ready in the factory workshop. Thereafter panels for roof, walls, doors, and windows along with required flashing i.e. ancillaries such as channels, corner angles are dispatched in the vehicle for assembly at the site. As the panels are in....
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.... understand the specific requirement of the customers. The customers place orders on the appellant specifying the dimension of the building required by them. On the basis of specifications prepared by the engineers of appellant for the whole buildings, dispatch instructions are issued to the factory by the engineers. The appellant then dispatches the materials of exact dimension so that when they are assembled at the site, a building as desired by the customer emerges. The Supreme Court in Hyderabad Engineering held that when the sale has the effect of occasioning the movement of goods from one State to another irrespective of whether the movement of goods is provided for in the contract of sale or not or whether the order is placed with any branch office or head office which resulted in movement of goods, it would be a case of inter-State sale resulting in exigibility of tax under section 3A of the CST Act. 21. In Ashok Leyland, the Supreme Court held that where the purchaser places an order for manufacture of goods as per his specification, a presumption can be raised that agreement to sell had been entered into. 22. In this connection, it would also be pertinent to refer t....
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.... in pursuance of those contracts, goods were manufactured at Faridabad according to specifications mentioned in the contracts. This, therefore, is not that type of case in which goods are manufactured in the general course of business for being sold as and when offers are received by the manufacturer for their purchase. Contracts of sales were finalised in the instant case at Delhi and specific goods were manufactured at Faridabad in pursuance of those contracts. Those were "future goods" within the meaning of section 2(6) of the Sale of Goods Act, 1930. After the goods were manufactured to agreed specifications, they were despatched to the head office at Delhi for being forwarded to the respective customers at whose instance and pursuant to the contracts with whom the goods were manufactured. The goods could as well have been despatched to the respective customers directly from the factory but they were sent in the first instance to Delhi as a matter of convenience, since there are better godown and rail facilities at Delhi as compared with Faridabad. The despatch of the goods of Delhi was but a convenient mode of securing the performance of contracts made at Delhi. Goods conformi....