Back
2009 Supreme(Mad) 4919
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. RAVIRAJA PANDIAN & THE HONOURABLE MR. JUSTICE M.M. SUNDRESH
The State of Tamil Nadu Represented by The Deputy Commissioner (CT), Chennai
Versus
Tvl.P.M.P. Iron & Steel India Limited, Chennai & Another
W.P. No.12507 of 2001
Decided on : 17-11-2009
For the Petitioner: Haja Nazirudeen, Special Government Pleader (Tax).
For the Respondents:R1, S. Raja Sekar, Advocate.
The burden of proof is on the assessee to substantiate consignment sale transactions and furnish true and genuine particulars in Form-F under the Central Sales Tax Act, 1956.
Headnote:
consignment sale - Central Sales Tax Act, 1956 - Section 3(a), Section 6(A), Rule 4(3-A) - The court discussed the disallowance of turnover claimed as consignment sale under Section 3(a) of the Central Sales Tax Act, 1956. The court emphasized the burden of proof on the assessee to substantiate consignment sale transactions and the requirement to furnish true and genuine particulars in Form-F. The court also cited relevant case laws to support its decision.
Fact of the Case:
The Revenue filed a writ petition against the order rejecting their appeal on the disallowance of turnover claimed as consignment sale under the Central Sales Tax Act, 1956.
Finding of the Court:
The Appellate Authorities found in favor of the assessee, holding that the transactions were consignment sales and not inter-state sales. The court emphasized the burden of proof on the assessee and the requirement to furnish true and genuine particulars in Form-F.
Issues: The main issue was whether the turnover claimed as consignment sale was correctly disallowed by the Assessing Officer.
Ratio Decidendi: The court held that the burden of proof is on the assessee to substantiate consignment sale transactions and furnish true and genuine particulars in Form-F. The court also emphasized that findings of the lower authorities should not be interfered with unless they are totally perverse or not supported by materials.
Final Decision: The writ petition filed by the Revenue was dismissed.
M.M. Sundresh, J.
The writ petition has been filed by the Revenue being aggrieved against the order passed by the Appellate Tribunal rejecting the appeal filed by the Revenue filed against the order of the Appellate Assistant Commissioner.
2. The point in controversy is the disallowance of turnover in a sum of Rs.3,57,41,932.63 as the consignment sale which claim was rejected by the Assessing Officer and treated the transaction as inter-state sale falling under Section 3(a) of the Central Sales Tax Act, 1956 is correct or not.
3. The brief facts leading to the case in a nutshell are hereunder:
The respondent is a manufacturer of C.T.D. Bars, M.S. Rounds, M.S. Angles and M.S. Casted Blocks and an assessee on the file of the Commercial Tax Officer, Park Town-II, Assessment Circle. In respect of the Assessment Year 1996-97, the respondent was assessed on a total and taxable turnover of Rs.3,57,41,933/- in the CST Order dated 212. 1998 in which the claim of the assessee in respect of the said turnover as consignment sale through their agent in other State has been rejected on the ground that the goods were sold by the agent in the other State on the very same day holding that without there being any pre-existing order such a sale could not be effected on the same day or the next day. The Assessing Officer also levied penalty under Section 12 (3) of the T.N.G.S.T. Act read with Section 9(2) of the C.S.T. Act at 150 percent of the tax due on the turnover of the consignment sale.
As against the said order, the assessee preferred an appeal before the First Appellate Authority – Appellate Assistant Commissioner, Chennai, who granted the relief in favour of the assessee in respect of entire turnover of Rs.3,57,41,933/-, as he found that the goods of the above turnover were sent to the other State, where it was unloaded in the agents godown and reloaded and despatched to various places on various dates subsequent to the receipt of goods. The entire penalty imposed by the Assessing Officer has been deleted on the ground that the turnover was offered but tax exemption was claimed as consignment sale.
The department filed a further appeal before the Sales Tax Appellate Tribunal (Additional Bench), Chennai in S.T.A.No.506 of 1999, which has been dismissed in favour of the assessee. Hence, challenging the same the Revenue has filed the present writ petition.
.4. The Assessing Officer has declined the exemption of the assessee for treating the transactions as consignment sales on the ground that the agents of the assessee have sold the goods on the date of the arrival from the State of Tamil Nadu and there was no evidence to show that the consignment received by the agents were taken to the stock and thereafter sold to various customers. Both the First Appellate Authority as well as the Tribunal have held that the copies of the sale pattials, invoices rendered by the agents and the excise gate pass cum consignment sale note would show that the transactions are consignment sales and not inter-state sales. The said authorities have also held that there is no evidence of any Hundi drawn by the assessee or any cash paid by the agents and received by the assessee before the arrival of the goods at the hands of the assessee.
5. The mere fact that the goods despatched by the assessee and received by the agents have been sold on the very same day after their arrival or the next day itself cannot be a ground to hold that the transactions are inter-state sales. Further, the assessee has produced before the Appellate authorities, the copies of sale pattials, invoices rendered by the agents as well as the excise gate pass. The above said documents clearly proves that the transactions are consignment sales as held by the Appellate authorities.
6. Section 6 (A) of the CST Act, 1956 mandates the assessee to substantiate his case that a particular transaction is a consignment sale and not an inter-state sale. Rule 4 (3-A) of the CST (Tamil Nadu)
