M/S Lohiya Industries, ... vs The State Of Ap. Rep. By The State ...
2023 Latest Caselaw 2210 Tel

         HONOURABLE SRI JUSTICE P.SAM KOSHY
                          AND
     HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY


       T.R.C.NO.90 OF 2005 & TREVC NO.11 OF 2006


COMMON ORDER: (per Hon'ble Sri Justice Laxmi Narayana Alishetty)


      We have heard Sri A.K.Jaiswal, learned counsel for the

petitioner and Sri K.Raji Reddy, learned senior Standing

Counsel for the respondents.

2. T.R.C.No.90 of 2005 is filed challenging the order dated

25.11.2005 passed in T.A.No.474 of 2004, which arises from

final assessment order for the assessment year 2000-01

dated 11.03.2004. T.Rev.C.No.11 of 2006 is filed challenging

the order dated 25.11.2005 passed in T.A.No.617 of 2004,

which arises from penalty proceedings of the Assessing

Officer for the assessment year 2000-01 dated 31.03.2004.

Since both the matters are inter-connected, the same are

being decided by this common order.

T.R.C.NO.90 OF 2005:

3. The present revision case is filed by the petitioner

aggrieved by the order of the Sales Tax Appellate Tribunal (for PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

short, 'Appellate Tribunal'), dated 25.11.2005 in T.A.No.474

of 2004.

4. By the impugned order, the Tribunal confirmed the levy

of higher rate of tax on the direct inter-state sales to which

C-forms were filed. The Appellate Tribunal, by majority

decision, had confirmed the order of the rejection of the

Assessing Authority on the claim of concessional rate of tax

in respect of C-forms.

5. The brief facts leading to filing of the present revision

are as under:

6. The petitioner is the registered dealer dealing in

manufacture of refined oils. The petitioner purchases raw

crude oil within and outside the State of Andhra Pradesh as

well as import crude oil from outside the country and

manufactures refined oil and sells the same within and

outside the State of Andhra Pradesh. Petitioner filed audit

report for the assessment year 2000-01 (CST) as required

under A.P.G.S.T. Act and the Rules and claimed exemption

on a turnover of Rs.7,78,78,963/- on consignment sales.

PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

7. The Assessing Authority i.e., Deputy Commissioner

(CT), Charminar Division, after investigating into the said

transaction of consignment sales and relying upon the

information gathered by the investigating team, had issued

show-cause notice dated 07.02.2002 to the petitioner. A

revised show-cause notice dated 13.02.2002 and further,

show-cause notice dated 27.01.2004 was also issued, to

which petitioner submitted detailed reply along with

voluminous material evidence running into 470 pages.

However, the Assessing Authority vide order dated

11.03.2004 passed final assessment order for the year 2000-

01 demanding payment of balance tax of Rs.49,45,929/-.

8. Aggrieved by the same, petitioner preferred appeal

before the Sales Tax Appellate Tribunal vide T.A.No.474 of

2004 along with stay application vide TMP No.152 of 2004.

The Sales Tax Appellate Tribunal vide order dated 24.02.2005

in TMP No.152 of 2004 passed conditional order directing the

petitioner to pay a sum of Rs.10.40,000/-. Petitioner

challenged the said order before this Court in W.P.No.6649 of

2005. This Court vide its order dated 29.03.2005 directed the

petitioner to deposit a sum of Rs.3,15,000/- as petitioner had PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

already deposited an amount of Rs.1,80,000/- pending

appeal before the Appellate Tribunal and directed the

Tribunal to dispose of the appeal within two months from the

date of the order. Thereafter, the Tribunal passed impugned

order dated 25.11.2005, which is under challenge.

9. The learned counsel for the petitioner submitted that

the Assessing Authority, while passing order dated

11.03.2004 did not consider the reply along with voluminous

material submitted by the petitioner. Learned counsel further

submitted that the Appellate Tribunal without appreciating

and considering the voluminous documents filed by the

petitioner, had confirmed the order of the Assessing

Authority. He further submitted that the Appellate Authority

was not right in confirming the order of the assessing

authority, who did not follow the principles of natural justice

since no reasonable opportunity was afforded to the

petitioner to rebut the evidence gathered by the Department

nor was any opportunity was given to the petitioner to cross-

examine the Agents from whom the Department was alleged

to have collected statements.

PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

10. He further submitted that the Appellate Tribunal was

not right in coming to the conclusion that the petitioner had

not furnished any documentary evidence in support of its

claim despite the petitioner placing voluminous documentary

evidence along with reply before the Assessing Authority,

which includes sale patties, evidence of dispatch of goods,

mode of payment etc., which show that the transaction is

otherwise than by way of sale as contemplated under Section

6A of the CST Act. He also submitted that the members of

Sales Tax Appellate Tribunal have passed three different

conflicting orders relating to factual aspects of the case. He

further contended that the material gathered by the

Department during the course of investigation was not made

available to the petitioner to enable them to rebut and the

same is gross violation of the principles of natural justice.

11. During the course of hearing, learned counsel for the

petitioner had referred to the order passed by the Appellate

Tribunal in great detail and also the conflicting observations of

the members of the Appellate Tribunal and finally submitted

that despite placing voluminous documents including C-forms,

F-Forms, the same were not considered by the assessing PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

authority as well as the Appellate Tribunal. He finally prayed to

allow the Revision and set aside the order of the Appellate

Tribunal. The learned counsel for the petitioner had also relied

upon the judgment of this Court in case of M/s. J.R.Exports v.

The Deputy Commissioner (CT) and others 1 in support of his

contentions.

12. Per contra, learned Senior Standing Counsel for the

respondent would submit that that the order passed by the

Appellate Tribunal is proper and the same was passed on due

consideration of the material as well as Rules of APGST, 1957.

He has specifically referred to Section 6A of CST Act, as per

which, when the dealer claims that he is not liable to pay tax in

respect of the goods sent from one State to another State i.e., to

any other place of his business, or to his agent or principal, as

the case may be and not by reason of sale, the burden of

proving the same is on the dealer.

13. Learned senior standing counsel further contended that

since the burden is on the dealer and he has to prove the same

either by way of Form-F or any other documentary evidence to

show that the transaction is otherwise than by way of sale and

2017 SCC Online Hyd 523 PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

also evidence of dispatch of goods. He further contended that in

the present case, petitioner did not produce evidence and thus,

failed to discharge his burden and on the other hand, the

assessing authority had enquired into the matter as well as the

material placed by the petitioner and having not satisfied with

the same, the assessing authority has rightly passed final

assessment order and finally prayed for dismissal of the

Revision.

CONSIDERATION:

14. On careful consideration of the facts and material placed,

this Bench is of the view that the Tribunal has recorded detailed

reasons for its findings both on facts and law.

15. It is relevant to extract Section 6A of the CST Act, which

reads as under:

"S.6A. Burden of proof, etc., in case of transfer of goods claimed otherwise than by way of sale. --

(1) Where any dealer claims that he is not liable to pay tax under this Act, in respect of any goods, on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business or to his agent or principal, as the case may be, and not by reason of sale, the burden of proving that the movement of those goods was so occasioned shall be on that dealer and for PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business, or his agent or principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority, along with the evidence of despatch of such goods 2 [and if the dealer fails to furnish such declaration, then, the movement of such goods shall be deemed for all purposes of this Act to have been occasioned as a result of sale].

(2) If the assessing authority is satisfied after making such inquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer under sub-section (1) 3 [are true and that no inter-State sale has been effected, he may, at the time of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to that effect and thereupon the movement of goods to which the declaration relates shall, subject to the provisions of sub- section (3)] be deemed for the purpose of this Act to have been occasioned otherwise than as a result of sale.

Explanation. --In this section, "assessing authority", in relation to a dealer, means the authority for the time being competent to assess the tax payable by the dealer under this Act.

(3) Nothing contained in sub-section (2) shall preclude reassessment by the assessing authority on the ground of discovery of new facts or revision by a higher authority on the ground that the findings of the assessing authority are contrary to law, and such reassessment or revision may be done in accordance with the provisions of general sales tax law of the State.

PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

16. As per clause (1) of Section 6A, a dealer who claims to

have effected consignment transfers, either must file F-form or

any other documentary evidence to show that the transaction is

otherwise than by way of sale and also the evidence of

despatching of the goods. Clause (2) of Section 6A contemplates

that the assessing authority can take up enquiry to ascertain

whether the particulars contained in the documentary evidence

produced and whether the particulars contained in Form-F filed

are correct or not. Therefore, as per clause (1) of Section 6A, the

burden is on the dealer to prove that the movement of the goods

was not because of sale, but was for transfer of such goods by

him to any other place of business or to his agent or principal

outside the State.

17. The Appellate Tribunal considered and relied upon the

following judgments:

i) Assam Company (India) Ltd., vs. Commissioner of Taxes, Assam, Gowahati and others 2;

ii) Commercial Tax Officer, Anti Evasion, Alwai v. Goodwill Paint Industries 3;

iii) CPK Trading Co. V. Addl.Sales Tax Officer, III Circle, Maltanchery and another 4;

107 STC 154

117 STC 71

76 STC 211 PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

iv) Ashok Leyland v. State of Tamilnadu 5;

v) Jay Industries v. State of A.P. 6.

18. The Appellate Tribunal, on due consideration of facts,

material, and settled legal position, has come to a conclusion

that in terms of clauses (1) and (2) of Section 6A, the burden is

cast on the petitioner to prove that the goods have moved

otherwise than by way of sales. It is not in dispute that the

petitioner has not furnished/produced any documentary

evidence while filing CST returns in proof of claim of exemption.

Only when the assessing authority has taken up

investigation/enquiry, the petitioner had adduced some

documentary evidence. Therefore, the burden so cast on the

petitioner to prove that the transactions were effected by it are

otherwise, than by way of sale has not been discharged initially

at the time of filing of returns.

19. Perusal of the order passed by the Appellate Tribunal

clearly reflects that the Appellate Tribunal had considered both

factual and legal aspects, recorded elaborate reasons while

allowing the appeal and also referred to and relied upon various

judgments for its conclusion. The Appellate Tribunal had also

134 STC 473

14 APSTJ 140 PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

discussed the purport of Section 6A of CST Act as well as Rule

14(3) of under CST Act (A.P.) Rules, 1957 and finally, confirmed

the order of rejection of the assessing authority on the claim of

concessional rate of tax in respect of C-forms.

20. The judgment relied upon by the learned counsel for

petitioner no way help the contention of the learned counsel

since the facts of the said case are different and the same are

distinguishable with the facts of present case.

21. In considered opinion of this Bench, the submissions

made by the learned counsel for petitioner as well as the

observations of the Appellate Tribunal referred to by the learned

counsel for petitioner are all in factual in nature and further,

learned counsel for petitioner failed to point out the question of

law to be considered by this Bench and therefore, the Revision

fails.

CONCLUSION:-

22. In view of the facts explained above, the petitioner failed

to make out any case warranting interference of this Bench with

the order passed by the Sales Tax Appellate Tribunal.

23. For all the aforesaid reasons, we are of the firm view that

the question of law framed by the Court, while admitting the PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

revision, deserves to be decided in the negative. Thus, the TRC

No.90 of 2005 deserves to be and is accordingly dismissed,

confirming the order of the Appellate Tribunal.

T.Rev.C.No.11 OF 2006:

24. This case is filed challenging the order dated 25.11.2005

of the Appellate Tribunal passed in TA No.617 of 2004. By the

impugned order, the Appellate Tribunal confirmed the penalty

proceedings of the assessing authority, i.e., Deputy

Commissioner (CT), Charminar Division dated 31.03.2004. The

penalty proceedings dated 31.03.2004 challenged under this

revision are consequential to the final assessment order dated

11.03.2004.

25. Since, T.R.C.No.90 of 2005, which is filed challenging the

final assessment order dated 25.11.2005, is dismissed,

consequently, T.Rev.C.No.11 of 2006, which is filed challenging

the consequential penalty proceedings also fails and is

accordingly dismissed.

26. In the result, both Revision Cases are dismissed. There

shall be no order as to costs.

PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

27. Pending miscellaneous applications if any, shall stand

closed.

__________________________________ P.SAM KOSHY, J

___________________________________ LAXMI NARAYANA ALISHETTY, J

Date: 11.09.2023 Kkm PSK,J & LNA,J TRC No.90 of 2005 & TREVC No.11 of 2006

HONOURABLE SRI JUSTICE P.SAM KOSHY AND HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

T.R.C.NO.90 OF 2005 & TREVC NO.11 OF 2006 Date: 11.09.2023 kkm