O R D E R

S.VAIDYANATHAN.,J and C.SARAVANAN.,J This Writ Petition has been filed challenging the order dated 08.10.2003 passed in S.T.A.No.758 of 2001 by the 1st Respondent, allowing Appeal filed by the 3rd Respondent against the order dated 21.06.2000 in Appeal No.AP/CST/133/1996 for the Assessment Year 1993-1994.

2. The Petitioner herein had suffered an assessment order in the hands of the 3rd Respondent in his proceedings dated 28.06.1996 bearing Ref.No.CST/15631/93-94. The dispute pertains to the alleged stock transfer effected by the Petitioner. However, the petitioner was unable to produce any evidence as a conclusive proof. Aggrieved by the aforesaid order, the Petitioner filed an Appeal before the 2nd Respondent in A.P.No.CST.No.133/96. The 2nd Respondent vide order dated 21.06.2000 partly allowed and partly remanded the case with the following observations:

"In this case, the appellants have factually dispatched the aluminium wire rod to the dealers at Mysore in Form-XX delivery Note Vide No.90619/14.9.97 and 901625/20/10/97. The dispatch of goods comes to Rs.8,83,814.00. There is no ambiguity in this dispatch on loan basis. Whereas the learned Assessing Officer in his assessment proceedings stated that the returned goods does not tally with the accounts of the appellants. Whereas in this case on hand, the appellants stated that this has not been tallied during the year 92-93. Whereas in the subsequent years it has been tallied.

The learned Assessing Officer in his proceedings at Page.4 inferred that there are difference in weight, materials allegedly returned. Whereas in this case on hand the learned Authorized Representative during the course of argument has placed evidences relating to the return of goods year by year. During the year 93-94 the balance due from the loanee was 38.212. MT Similarly, during the year 94-95 still there is a balance of 15,590 MT same position remains for the year 1995-96. There was no return of loan during the year 95-96. Subsequently in the year 96-97 they have returned the the goods at 68.830 MT thereby the appellants have to return to an extent of 1.240 Mt. Thus the loan given to the dealer Tvl.Transmission Wire and Accessories, Mysore had been returned during the year 96-97 only. The entire loan had been returned during the year 96-97. Apart from that the appellants becomes loanee to the dealers at Mysore for the goods 1.240 MT. Therefore quantitatively the appellants have legally proved their stand on loan and in return. Therefore in this case factually there is no difference in weight of goods sent based on loan transaction. Therefore in this case on hand the levy of tax on loan transaction in question is liable to be deleted.

Accordingly, this point stand answered."

Regarding the assessment to the turnover of Rs.16,50,000/- the appellants have not produced any recorded evidence to their favour. Therefore in this case on hand, the assessment made to an extent of Rs.16,50,000/- is liable to be confirmed by the result the penalty revised under Section 12(3)(b) of the Act is also confirmed."

3. Being Aggrieved over the same, the State preferred Appeal in STA.No.758 of

2001 before the 1st Respondent Tribunal . The State Appeal was allowed. The operative portion of the said order reads as under:

"6.We heard the arguments of both sides and perused the relevant records. The important question that arises for consideration is whether the transactions between the respondent and the other state dealer can be construed as loan transactions?

7. The respondents have claimed that their transactions were only loan transactions. In these circumstances, pertainent it would be to refer to the definition for sale in the Act (Central Sales Tax Act'56) 2 (g) "Sale" with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person or another in the course of business for cash deferred payment or other valuable consideration and includes (i) a transfer, other