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2002 DIGILAW 655 (KER)

ESAB INDIA LIMITED v. STATE OF KERALA

2002-09-30

C.N.RAMACHANDRAN NAIR, G.SIVARAJAN

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JUDGMENT C. N. RAMACHANDRAN NAIR J. – The only issue involved in this case is whether the Tribunal was correct in declining the exemption claimed by the petitioner in respect of stock transfer made to the branch. According to the petitioner, the petitioner has produced F form in terms of section 6-A of the Central Sales Tax Act, 1956 and therefore, the authorities below including the Tribunal are not justified in disallowing exemption. Counsel for the assessee Sri Jose Joseph contended that apart from form F declaration the petitioner has also furnished declaration in form 27B in support of the stock transfer. He has also contended that lorry receipt was also produced as proof of stock transfer, though the Tribunal has not dealt with it in the detailed order. The Government Pleader appearing for the respondent contended that exemption under section 6-A can be granted only if stock transfer is proved. According to him, apart from production of F form, documents to prove dispatch of goods is also required. We have gone through the order of the Tribunal and considered the detailed arguments raised by the petitioner with reference to the decisions of this Court. Counsel has referred to the decisions of this court in C.P.K. Trading Company v. Additional Sales Tax Officer [1990] 76 STC 211 and in Vijayamohini Mills v. State of Kerala [1989] 75 STC 63 and contended that F form declarations are sufficient to establish stock transfer. It is not in dispute that the burden of proof to prove stock transfer under section 6-A of the Central Sales Tax Act is on the dealer claiming it. In other words, the department is entitled to assume in the absence of proof of stock transfer that transfer of such goods is under contract of sale and is assessable under the Central Sales Tax Act. It is stated that the petitioner has produced F form. F form itself provides that proof of dispatch of goods has to be produced while claiming exemption under section 6-A of the Central Sales Tax Act, 1956. Section 29(2) of the Kerala General Sales Tax Act, 1963 provides for transport of goods within and out of Kerala by registered dealers in Kerala and such transfer should be accompanied by a sale bill, way bill Or a delivery note in form No. 26. Section 29(2) of the Kerala General Sales Tax Act, 1963 provides for transport of goods within and out of Kerala by registered dealers in Kerala and such transfer should be accompanied by a sale bill, way bill Or a delivery note in form No. 26. Since the transaction by the petitioner who is a registered dealer is admittedly not a sale, it has to be necessarily under a delivery note in form No. 26 which is a departmentally issued form, the duplicate of which is used for transport of goods within and outside the State. If the petitioner had transported the goods under cover of delivery note in form No. 26, the check-post authorities at the border would have affixed the seal when it leaves the boundary of State of Kerala and also when it reaches the border of the other State. We do not know why a limited company which is also a registered dealer, adopted this method for transport of goods without being accompanied by a statutory document. The Tribunal has given a finding that the petitioner has not produced any documents towards proof of transport of goods. We also note that no lorry receipt as claimed by the petitioner is seen discussed by any of the authorities below including the Tribunal. The lorry receipt by itself is no evidence. Despatch of goods in the course of inter-State movement under section 6-A should be despatch of goods from the business place of the dealer across the boundary of the State and therefore, proof of crossing of the goods through the boundary check-post is a necessary pre-condition for granting exemption under section 6-A. Of course the check-post seal may be lacking in the case of transport of goods through railway. However, since check posts are provided in all the borders of the State, there would have been no difficulty for the petitioner and for that matter any dealer to obtain a check-post seal on the document accompanying transport of goods to be produced before the assessing authority at the time of claiming exemption on stock transfer. Therefore, we generally feel that the Tribunal and the authorities below rightly declined to act on the basis of a mere F form produced by the petitioner. Therefore, we generally feel that the Tribunal and the authorities below rightly declined to act on the basis of a mere F form produced by the petitioner. Since form F declaration is issued by the branch where the goods are stated to have reached, the branch should have sent the transport document containing check post seals which enables the department to verify, if necessary it's correctness by referring to the entries in the check post register. Therefore, the mere production of declaration in F form is not sufficient to grant exemption under section 6-A. In fact since F form itself provides for proof of despatch of goods, the form produced without being accompanied by such proof is not to be acted upon. This court has held in the decisions above referred to that form F is not sufficient to prove stock transfer and that it is the physical transport of goods what is required to be proved under section 6-A of the Central Sales Tax Act. In the circumstances and in the absence of any documents to prove physical transfer of goods across the boundary, we feel there is nothing wrong in the Tribunal's order. At this distance of time the petitioner cannot ask for time for production of documents. The same plea was made before the Tribunal which was turned down by the Tribunal. We feel the documents which could not be produced before the Tribunal at the relevant time, could not be produced after eight years from the date when the transfer took place. Tax revision case is devoid of merits and is accordingly dismissed.