Allahabad High Court
Swastik Rubber Products (P.) Ltd. vs Commissioner Of Sales Tax And Ors. on 15 April, 1988
Equivalent citations: [1989]72STC52(ALL)
JUDGMENT R.R. Misra, J.
1. This revision is directed against an order dated 31st March, 1987 passed by the Sales Tax Tribunal in regard to the liability of the assessee under the Central Sales Tax Act for the assessment year 1972-73.
2. The Tribunal has dismissed the appeals filed by the assessee for the assessment years 1971-72 and 1972-73, by the same consolidated impugned order dated 31st March, 1987 and has upheld the taxability of the assessee under the Central Sales Tax Act. Consequently, the assessee has filed Revision No. 527, which related to the assessment year 1971-72 and the present revision with regard to the assessment year 1972-73. Subsequently, Revision No. 527 was got dismissed by the assessee as not pressed. Therefore, I am left with the present revision filed by the assessee for the assessment year 1972-73 alone.
3. During the said assessment year the assessee engaged itself in the business of footwear. During both the assessment years 1971-72 and 1972-73 the assessee had admitted its liability to pay Central sales tax. The account books of the assessee have been accepted.
4. The controversy between the parties, however, is confined with regard to the goods which are stated by the assessee to be the branch transfers only. This contention raised on behalf of the assessee has not been accepted by any of the authorities below. The claim of the department is that the same are inter-State sales liable to be taxed under the Central Sales Tax Act.
5. I have heard learned counsel for the parties. The submission made by the learned counsel for the assessee is that Section 6A of the Central Sales Tax Act was introduced with effect from 1st April, 1973 and, therefore, the said provision could not apply to the year in dispute, i.e., assessment year 1972-73. Elaborating his arguments learned counsel for the assessee submitted that in view of the fact that Section 6A of the Central Sales Tax Act was not on the statute book in the relevant assessment year, the authorities below including the Sales Tax Tribunal were not right in placing the burden of proof on the assessee to show that the transactions were not inter-State sales. In support of his submission that the said provision will not apply to the case of the assessee for the assessment year 1972-73, he has placed reliance on a decision of Magan Lal Nem Kumar v. Commissioner of Sales Tax, U.P. (1980) 2 UPTC 1059. In so far as this case is concerned, no assistance can be derived from the same because this case relates to a period when Section 6A of the Central Sales Tax Act was not on the statute book. The other case relied upon by the learned counsel for the assessee is the case of Mittal & Company v. Commissioner of Sales Tax, U.P., Lucknow (1987) 2 UPTC 1226. A perusal of the judgment of this Court in the said case shows that in the said case the provisions of Section 6A of the Central Sales Tax Act were not considered at all. On the other hand, I find that the assessment in question for the assessment year 1972-73 was made on 25th February, 1976, i.e., long after Section6A of the Central Sales Tax Act came into force. The said section is procedural in nature and only shifts the burden of proof to the assessee. It has been repeatedly held in a large number of cases that such procedure must be applicable with retrospective effect, i.e., from the date they came into force. Reference for this proposition may be made to the cases of Lajja Ram Mahesh Dutt v. Commissioner of Sales Tax, U.P., Lucknow [1975] 35 STC 450 (ALL), State of Madras v. Lateef Hamid & Co. [1971] 28 STC 690 (SC), Tikaram and Sons Ltd. v. Commissioner of Sales Tax, U.P. [1968] 22 STC 308 (SC), Commissioner of Sales Tax, M.P. v. Saluja and Company [1981] 48 STC 526 (MP), Commissioner of Sales Tax, U.P. v. Rajasthan Iron Traders (1986) 2 ATJ 319 and in the last a decision rendered by me in the case of Commissioner of Sales Tax, U.P. v. Pravin Chemicals Industries, Ghaziabad (1987) 1 UPTC 362, which has been noticed by the Tribunal under the impugned order. It has been held that in view of Section 6A of the Central Sales Tax Act, the burden lay squarely on the assessee to show that the transactions were not inter-State. Moreover, from a perusal of the following Statement of Objects and Reasons, appended for the insertion of the said provision by the amending Act No. 61 of 1972, the reasons for the said enactment will become apparent:
Central sales tax is not leviable in respect of transactions of transfer of goods from a head office or a principal to a branch or an agent or vice versa as these do not amount to sales. This aids evasion in that dealers try to show even genuine sales to third parties as transactions of this type. Accordingly, it is proposed to provide that the burden of proving that the transfer of goods in such cases is otherwise than by way of sale shall lie on the dealer who claims exemption from tax on the ground that there was in fact no sale.
6. If the above objects and reasons are kept in view it is apparent that the said provision was enacted by the legislature to meet the mischief of evasion of tax through the medium of having despatched the goods in various States by a dealer in the manner aforesaid.
7. In view of the foregoing discussion, I find that there is no force in the contention raised on behalf of the assessee.
8. Learned counsel for the assessee next submitted that the findings recorded by the Tribunal based on no evidence and that there is no material on record to show that any inter-State sale has taken place. In order to examine this contention, it is necessary to set out some facts and findings as have emerged from the impugned appellate order of the Tribunal. In paragraph 6, the Tribunal has set out various reasons as to why the theory set up by the assessee for the assessment year 1972-73, that the transactions in questions were stock transfers only, was rejected. In view of the aforesaid detailed facts, the authorities below both the assessing officer as well as the first appellate authority, concluded that the transfer invoices on which the dealer has deleted the numbers were related to the orders of purchasing dealers and goods were sent as per those orders of the purchasers. Therefore, the movement of goods from Ghaziabad was during the course of inter-State sale. Paragraphs 8 and 9 of the appellate order of the Tribunal further set out details and reasons as to why the goods declared as branch transfers were held to be inter-State sales and ultimately, in paragraph 21 of the impugned order it has been clearly stated that the facts mentioned in para 6 of the order clearly points out the fact that the transfer invoices from Ghaziabad depot to Sapron depot denotes the same quantity and the value of goods which were in the sale bill of the Sapron depot. There were certain MD numbers in the transfer invoices and there were certain numbers in GR numbers and invoices which were rubbed out by the dealer. A finding of fact has also been recorded that accounting procedure and sale for the assessment years 1971-72 and 1972-73 were the same. It has been held that after hearing of the case for the assessment year 1972-73 when the dealer found that he is coming within the purview of the Central Sales Tax Act by producing these packing lists and the liability of tax under the Central Sales Tax Act is liable to be fastened for the assessment year in dispute, he thought it better to inform that he has not been keeping packing lists. Further the explanation of the assessee with regard to MD numbers and GR numbers also not found to be correct. These MD numbers are the serial of indents. It has been held that if the dealer thought that they related to something also, he should have shown the same from his books of account. But the dealer failed to do so. The dealer in this regard has also filed an affidavit but the same was not substantiated from the account books. Therefore, the said explanation contained in the affidavit was not believed by the Tribunal. That apart, the explanation of the assessee that MD numbers related to Mohan Nagar depot was also disbelieved on the findings that MD numbers have been used in the case of sales to other dealers from Mohan Nagar depot. It-has been further held by the Tribunal that from the facts of the assessment year 1972-73 it is proved that goods sent from Ghaziabad depot by the dealer to Sapron depot were sold in the same quantity to the customers from there and the numbers indicated in the transfer invoices were the indents of the customers for whom the goods were appropriated and sent from Mohan Nagar depot. Therefore, on an appraisal of entire facts and the circumstances of the case the Sales Tax Tribunal has recorded a finding of fact that the alleged branch transfers were, in fact inter-State sales.
9. In view of the aforesaid material, which has been discussed by the Sales Tax Tribunal under the impugned order, in my opinion, there is no force in the contention raised by the learned counsel for the assessee that the Tribunal has recorded the said findings without any material. No other point was pressed.
10. In the result, the revision fails and is dismissed with costs. The interim order dated 13th July, 1987 is vacated.