JUSTICE DILIP GUPTA:

CST Appeal No. 1 of 2011 has been filed by M/s. Kedia Vanaspathi Ltd.¹1. the appellant to assail the order dated 29.04.2010 passed by the Sales Tax Appellate Tribunal, Andhra Pradesh²2. the Sales Tax Appellate Tribunal dismissing the appeal filed by the appellant against the order passed by the Deputy Commissioner on 29.03.2004 in respect of the Assessment Year 2000-2001.

2. CST Appeal No. 2 of 2011 has been filed by the appellant to assail the order dated 29.04.2010 passed by the Sales Tax Appellate Tribunal dismissing the appeal filed by the appellant against the order dated 29.03.2004 passed by the Deputy Commissioner imposing penalty upon the appellant.

3. The appellant is involved in the business of manufacturing and selling of refined oils and vanaspathi and is operating two units. Unit I is situated at Hyderabad and Unit II is situated at Mahaboobnagar District.

4. For the Assessment Year 2000-01, the appellant disclosed gross turnover of Rs. 85,63,28,607/- and claimed exemption on a turnover of Rs. 84,62,10,492/-. However, when the business premises of the appellant were inspected by the Andhra Pradesh State Authorities on 05.07.2000, it was noticed that the appellant had camouflaged inter-State sales as consignment sales and consignment despatches to agents outside the erstwhile State of Andhra Pradesh. Consequently, to examine the claim of exemption relating to consignment sales, inspection was undertaken by the Joint Commissioner and various teams were deputed to other States to verify the genuineness of the transactions. The enquiry revealed that most of the transactions were bogus and meant for non-existing dealers. In certain cases, even the dealers denied having any business transactions with the appellant.

5. A show cause notice dated 14.02.2002 was issued to the appellant alongwith enquiry reports as exhibits. The appellant filed a reply on 11.03.2002. A revised show cause notice was served upon the appellant on 27.01.2004 disallowing certain consignment turnovers based on further enquiries made by the department.

6. The Deputy Commissioner passed an order dated 12.03.2004 holding that the dealers, as specified by the appellant, were non-existent and in some cases the F Forms produced by them were bogus and fabricated. The Deputy Commissioner, by an order dated 12.03.2004, imposed the following total tax liability of Rs. 2,33,58,647/-, on a net turnover of Rs. 23,48,74,501/-, in the following manner:

7. According to the department, as the appellant had submitted false declarations and details on a turnover of Rs. 21,37,53,657/-, a show cause notice dated 16.03.2004 was issued to the appellant proposing penalty. The appellant filed a reply and thereafter an order dated 29.03.2004 was passed imposing a penalty of Rs. 6,43,72,314/- on the appellant under section 9(2) of the Central Sales Tax Act, 1956³3. the CST Act read with section 7A(2)(i) of the Andhra Pradesh General Sales Tax, 1957⁴4. the 1957 AP Sales Tax Act.

8. The appellant filed two appeals, namely, T.A. No. 340 of 2004 and T.A. No. 611 of 2004, against the assessment order dated 12.03.2004 and the penalty order dated 29.03.2004 before the Sales Tax Appellate Tribunal.

9. A common order dated 29.04.2010 was passed by the Sales Tax Appellate Tribunal confirming the findings of the Deputy Commissioner and the two appeals filed by the appellant were dismissed.

10. The Sales Tax Appellate Tribunal first examined whether the appellant had discharged the burden of proof as required under section 6A of the CST Act and whether the appellant had submitted documents as required under rule 14(3) of the Central Sales Tax (Andhra Pradesh) Rules, 1957⁵5. the 1957 AP Rules to establish that the relationship between the appellant and the dealers in other States was that of a principal and a