TaxTMI 
TaxTMI 
2026 (4) TMI 1351
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....al turnover under CST Act. Rs.12,04,91,495/- Less exemption claimed on a) Sales in the course of import b) Sales in the course of transit Rs.7,29,92,498/- Rs. 4,74,98,297/- Taxable turn over NIL *As far as the Rs. 56,86,60,514/- as total turnover in respect of transactions under TNGST Act, same was examined and separate order came to be passed. 3. In respect of exemption sought under the Central Sales Tax Act, the checking of the accounts, unravelled that the assessee claims exemption for High Sea sales by transfer of documents of title to goods in the course of import under Section 5(2) of the Central Sales Tax Act and produced High Sea sales invoices, import invoices and the Bill of Lading. Examination of these documents further disclosed that, in the invoices of High Sea sales, it was mentioned that, 'the goods delivered under Hire Purchase Agreement.' Being a sale under hire purchase agreement which means that the goods remain the property of the dealer. Instead the same is shown as High Sea sales as if it is an outright sale. Similarly for the exemption claimed on sales in transit under the Central Sales Tax Act....
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....tax of Rs. 79,29,806.92/-. After deducting Rs. 6,40,882/- the tax already paid from Rs. 79,29,806.92/- demand notice for Rs. 72,88,925/- issued. In addition as surcharge, additional surcharge, additional tax and penalty amounting to Rs. 27,79,204/- levied and notice was issued to the assessee. 8. Against the assessment order dated 27.02.1999 passed under the TNGST Act, the assessee preferred an appeal before the Appellate Authority in A.P.No.171 of 1999. The said appeal dismissed on 22.10.2001. Aggrieved by the dismissal of the appeal, the assessee filed in T.A.No.693 of 2002 before the Sales Tax Appellate Tribunal (STAT). 9. The appeals in T.A.No.692 of 2002 and T.A.No.693 of 2002, both filed by the assessee for the same assessment year; one in respect of transactions claimed to be covered under the Central Sales Tax Act and the other covered under the TNGST Act were taken up together for consideration by the Tamil Nadu General Sales Tax Appellate Tribunal and a common order dated 31.10.2012 came to be passed, confirming the order of the Appellate Assistant Commissioner (Commercial Tax), the Appellate Authority. The said common order of TNSTAT is the subject matter of the ab....
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.... the Tribunal has committed an error of law in rejecting the claim of transit sales made by the petitioners in terms of Section 6(2)(b) of the Central Sales Tax Act, 1956? 2. Whether the Tribunal has failed to see that even in respect of hire purchase transactions, a sale by transfer of documents of title during the movement of the goods, could be made as a result of the definition of 'sale' under Section 2(g) of the Central Sale Act, 1956 and the definition of 'sale' as found in Section 2(n) of the Tamil Nadu General Sales Tax Act, 1959? 3. Whether the Tribunal has committed an error of law in confirming the imposition of penalty contrary to the principles laid down by this Hon'ble Court in the judgment reported in 125 STC 505 (Apollo Saline Pharmaceuticals (P) Ltd vs. Commerical Tax Officer (FAC))? 4. Whether the Tribunal has committed an error of law in finding that the assessment of the petitioners was a best of judgment assessment under Section 12(2) of the Tamil Nadu General Sales Tax Act, 1959? 12. T.C.(Revision) No: 25/2013: This Tax Case (Revision) arise in respect of the proceedings dated 27.02.1999 of the Commercial Tax Officer. 13. Tr....
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....by retaining the title. Therefore, it is not a sales in the course of interstate trade as contemplated under Section 6(2)(b) read with Section 3(b) of the Central Sales Tax Act. 16. High Sea sales combined with hire purchase agreement:- The assessee contention is that the sales in the course of import were high sea sales and therefore, not within the purview of the TNGST Act. According to the assessee, the hirer/customer cleared the machineries from the Customs. While the goods were on the high seas, they have transferred the documents of title in favour of the hirer. The finding of the Assessing Officer that the imported goods were cleared by the assessee after paying all the charges on behalf of the purchaser and thereafter handed over the goods to the purchaser is factually incorrect. 17. In contra, the contention of the Department is that, on verification of the copies of bill of entry, agreements with the customers of the assessee, import purchase invoice and other connected documents, it was found that although the sales in the course of import effected by making bills of sale by transfer of document of title to the goods earlier to the date of bill of entry, the cus....
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....sion:- The learned Counsel appearing on behalf of the assessee, for the first time in the revision as an additional grounds, pleaded that the legislative power of the State to tax hire purchase transactions falling under Article 366(29A) of the Constitution is not unfettered. Article 269(1) of the Constitution vests the power to tax on sale or purchase of goods which takes place in the course of interstate trade or commerce with the exclusive domain of Union Government. Article 286(1)(a) prohibits States from imposing a tax on sale or purchase which takes place outside the State and Article 286(1)(b) prohibits States from imposing a tax on sales or purchases which takes place in the course of export or import into the territory of India. 21. Further, in the Seventh Schedule, List II (State List), the Entry 54 limits the power of the State to impose tax, subject to Entry 94 A of List-I (Union List). Entry 94 A of List-I, confers exclusive power to the Union, to tax on inter-state sales or purchases. Therefore, the State has no power to tax the assessee. 22. To buttress his submission, the Learned Counsel for the assessee relied on the judgment of the Hon'ble Supreme Court r....
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....nts and a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment, or other valuable consideration. 26. Section 3 of Central Sales Tax Act, speaks about 'inter-state sale'. Section 4 of the Central Sales Tax Act, speaks about when a sale or purchase said to take place outside the State. Section 5 of the Central Sales Tax Act, speaks about when a sale or purchase said to take place in the course of import or export and Section 6 speaks about when a dealer is liable to pay tax on interstate sales. For the sake of convenience, the above provisions are extracted below:- Section 3 of Central Sales Tax Act, 1956. 3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Section 4 of Central Sales Tax Act, 1956. ....
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....section (1), if any designated Indian carrier purchases Aviation Turbine Fuel for the purposes of its international flight, such purchase shall be deemed to take place in the course of the export of goods out of the territory of India." Section 6 of Central Sales Tax Act, 1956. "6. Liability to tax on inter-State sales (1) Subject to other provisions contained in this Act, every dealer shall, with effect from such date as the Central government may, by notification in the Official Gazette, appoint, not being earlier than thirty days from the date of such notification, be liable to pay tax under this act on all sales [of goods other than electrical energy] effected by him in the course of inter-state trade or commerce during any year on and from the date so notified. Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods which, in accordance with the provisions of sub-section 3 of section 5 is a sale in the course of export of those goods out of the territory of India. [1A] A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him in the course of inter-state trade or comm....
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....onnel of - (i) any foreign diplomatic mission or consulate in India; or (ii) the United nations or any other similar international body, entitled to privileges under any convention to which India is a party or under any law for the time being in force; or (b) any consular or diplomatic agent of any mission, the United Nations or other body referred to in sub - clause (i) or sub-clause (ii) of clause (a). Purchases any goods for himself or for the purposes of such mission, United nations or other body, then, the Central Government may, be notification in the Official Gazette, exempt, subject to such conditions as may be specified in the notification, the tax payable on the sale of such goods under this Act." 27. Article 286(1) of the Constitution of India restricts the States from imposing tax on the sale or purchase of goods where such sale or purchase takes place either outside the said State or in the course of the import of the goods into, or export of goods out of, the territory of India. Article 286(2) gives power to the Parliament to formulate principles for determining when a sale or purchase of goods takes place in any of the ways ment....
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....n of the period under 'Hire Purchase' agreement as local sales charging 8% single point and 20% surcharge and addl.surcharge on the written value. (ii) Firstly, the dealer has obtained purchase order from their customer and direct their suppliers to despatch the goods. Thus it occasions the movement of goods at the other State and hence the transaction will not come under Section 3(b) of the C.S.T. to effect transit sale under Section 6(2)(b) of the C.S.T. Act. (iii) Where the contract itself occasioned the movement of goods from one State to another, the sales were inter-State sales falling under clause (a) of Section 3 and not under Clause (b) of Section 3. Clause (b) applies only where goods are put in transit without prior contract of sale and they are sold by transfer of documents, while they are still in transit. (iv) It is not possible to invoke simultaneously both Section 3(a) and 3(b) in respect of the same transaction. (v) Perusal of the records revealed that the goods sent by the consignor at the at the other State had been consigned to the dealers viz. Tvl.Cholamandalam Investment and Finance Co. Ltd, Madras who had delivered ....
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..... The next contention of the assessee is that the movement of goods both in transit sales as well as in High Seas sales occasioned before the goods entered the assessee State from the other State or before crossing the customs frontiers of India, as the case may be. It is claimed that the Hire purchase agreement is Part and Parcel of the transaction. So, it cannot be isolated and treated as a separate transaction. On entering into the hire purchase agreement, the goods get appropriated and it occasions the movement of the goods. Without the hire purchase agreement, there will be no occasion for the movement of goods. 37. The contention of the assessee that the hire purchase transaction taken place outside the state of Tamil Nadu and therefore falls within the scope of inter-state trade is not borne by the record but only by way of submission. In fact the records indicate entirely a contrary situation. The hire-purchase transaction has taken effect within the State of Tamil Nadu and also suppose to culminate by convey the title on payment of entire dues at later point of time. Therefore, the provision applicable is Section 3(2) of the Tamil Nadu General Sales Tax Act, 1959, which....
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....f title to goods, prior to the date of bill of entry. The Customs duty has been charged and paid only on the import value and not on the High Sea Sales value. The conditions mentioned in the Memorandum of Undertaking proves that the assessee has filed the bill of entry, cleared the goods and paid all the charges on behalf of the ulterior purchaser (customer) and only thereafter the machinery has been handed over to the customer under hire purchase. The total amount financed included the value of import, charges paid for clearance of the goods from customs, import duty paid and the profit margin of the assessee. The hire purchase agreement and invoice with written down value is for the said total amount. Thus, the records indicate that the import is a separate transaction and the sales by hire purchase is separate transaction. 42. Under these circumstances, the finding of the Tribunal disallowing the claim of transit sale is absolutely in order, since the appropriation of the goods occurred only after crossing the customs frontiers of India. The penalty imposed for wilful suppression is also sustainable. By making two invoices, the assessee has failed to establish eligibility for....