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2009 Supreme(Mad) 4920
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 Deputy Commissioner (CT), Coimbatore
Versus
Tvl. The Coimbatore Pioneer Rolling Mills Coimbatore & Another
W.P. No.781 of 2002
Decided on : 17-11-2009
For the Petitioner: Haja Naziundeen, Special Government Pleader (Tax).
For the Respondents:R1, S. Sivanandam, R2, Tribunal, Advocates.
The burden of proof on the assessee to establish the particulars furnished in Form-F and the relevance of documentary evidence in determining the nature of a transaction.
Headnote:
consignment sale - Commercial Tax - C.S.T. Act, 1956 - Section 3(a), Section 6(A), Rule 4(3-A) of the CST (Tamil Nadu) Rules, 1957 - VOL.95 1994 STC 273, VOL.96 1995 STC 98, VOL.72 1989 STC 294, VOL.126 2002 STC 458, VOL.125 2002 STC 304 - The court discussed the burden of proof on the assessee to prove the particulars furnished in Form-F, the relevance of documentary evidence, and the interpretation of legal provisions in determining consignment sale versus inter-state sale. The court also highlighted the limitations of the writ court in matters involving facts and transactions, emphasizing the need for error apparent on the record or violation of statutory provisions for court intervention.
Fact of the Case:
The Revenue challenged the order passed by the Appellate Tribunal, disputing the classification of a transaction as consignment sale instead of an inter-state sale under Section 3(a) of the C.S.T. Act, 1956. The dispute centered around the disallowance of turnover claimed as consignment sale, the rejection of the claim by the Assessing Officer, and subsequent appeals by the assessee.
Finding of the Court:
The court found that the assessee had provided documentary evidence to support the claim of consignment sale, and the lower authorities had considered the materials available on record in their decisions. The court emphasized the limitations of the writ court in matters involving facts and transactions, stating that interference was not warranted in this case.
Issues: The issues involved the classification of a transaction as consignment sale or inter-state sale, the burden of proof on the assessee, and the relevance of documentary evidence in establishing the nature of the transaction.
Ratio Decidendi: The burden of proof is on the assessee to prove the particulars furnished in Form-F, and the relevance of documentary evidence is crucial in determining consignment sale versus inter-state sale. The court emphasized the limitations of the writ court in matters involving facts and transactions, stating that interference was not warranted in this case.
Final Decision: The writ petition was dismissed, and no costs were awarded.
M.M. SUNDRESH, J
The Revenue who is the petitioner herein has filed the present writ petition, challenging the order passed by the Appellate Tribunal in allowing the appeal filed by the assessee who is the first respondent herein and dismissing the Cross Appeal filed by the Revenue by holding that the transaction involved in the relevant period is only a consignment sale and not an inter state sale.
2. The point in controversy is the disallowance of turnover in a sum of Rs.12,22,374/- 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 C.S.T. Act, 1956 is correct or not.
3. The brief facts leading to the case in a nutshell are hereunder:
The respondent is a dealer in Iron and Steel and an assessee on the file of the Commercial Tax Officer, Thudiyalur Assessment Circle, Coimbatore. In respect of the Assessment Year 1991-92, the respondent was assessed on a total and taxable turnover of Rs.19,27,303/- as against the reported total and taxable turnover of Rs.19,27,303/- and Rs.7,04,929/- respectively in the CST Assessment Order dated 30.09.1993 in which the claim of the assessee in respect of turnover of Rs.12,22,374/-as consignment sale through their agent at Kerala State has been rejected on the ground that the goods were sold by the agent in the other State on the very same day or the next day and 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, an appeal was preferred by the assessee before the First Appellate Authority – Appellate Assistant Commissioner, Coimbatore, who granted the relief in favour of the assessee in respect of a turnover of Rs.4,31,627/-, as he found that the goods of the above turnover were sent Kerala, where it was unloaded in the agents godown and reloaded and despatched to various places on various dates subsequent to the receipt of goods. In respect of the rest of the turnover in a sum of Rs.7,90,747/- the order of the assessing authority was confirmed. 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 assessee filed a further appeal before the Sales Tax Appellate Tribunal (Additional Bench), Coimbatore. The Department also filed an Enhancement Petition for restoration of the order of the Assessing Officer which has been taken on file as T.C.M.P. No.95 of 1994.
4. The Assessing Officer came to the conclusion on the basis that the entire goods sent as consignment were sold within a day or two in other States which cannot be done unless or otherwise there is a pre-existing purchase order for the goods. Thus, the entire transaction was treated as an inter-state sales falling under Section 3(a) of the C.S.T. Act. The First Appellate Authority has deleted four transactions for which the assessee was able to file the proof of having unloaded the goods in the place of business of the agent at Palakkad in Kerala.
5. It is seen from the order of the Tribunal that the assessee has filed all the necessary documents prescribed under Rule 4 (3) of the C.S.T (Tamil Nadu) Rules, 1957 like Form-F declaration, pattials and stock statement rendered by the agent as well as the other details required by the Assessing Officer and proving the claim of consignment sale. However, those documents were brushed aside by the Assessing Officer on the ground that the goods were despatched to the ultimate buyer within a day or two of the arrival and accordingly, the claim of consignment sale has been rejected. There is no answer whatsoever with regard to the documents produced as referred to above including the agreement of
