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2006 DIGILAW 387 (KER)

Carborundum Universal Ltd. v. State of Kerala

2006-07-06

K.S.RADHAKRISHNAN, V.RAMKUMAR

body2006
Judgment :- Radhakrishnan, J. Assessee is a Company engaged in the manufacture of aluminum oxide granules at Edappally in Ernakulam district. Assessee had a branchat Visakhapatnam which was subsequently closed. The assessment year in question relates to 1999-2000 under the Central Sales Tax Act. Assessee filed its return claiming exemption on stock transfer for Rs.77,75,219/- out of which it was pointed out that, turnover of Rs. 75,77,525/- was stock transfer to the factory at Visakhapatanam. Various other reliefs were also sought for in the return. We are in this case concerned with the question whether assessee is entitled to get claim exemption on stock transfer for the amount of Rs.75,77,525/-. Assessing authority disallowed the claim on the ground that the assessee had not produced proof for the transfer and movement of goods from the factory and evidence for crossing the check posts. 2. Assessee took up the matter in appeal and the claim was also rejected by the Deputy Commissioner (Appeals) stating that the assessee had not produced F from declaration to prove that the transactions were otherwise than by way of sale. Appellate authority placed reliance on the decision in M/s Ashok Leyland Ltd v. State of Tamil Nadu (2004) 134 STC 473) wherein the apex court held that the initial burden of proof is on the dealer to prove that the movement of goods was occasioned by reason of transfer of such goods otherwise than by way of sale. Appellate authority also found that filing of Form F declaration is mandatory and only on filing of such declaration the assessing authority would be able to make an inquiry for the purpose of passing an order after arriving at the requisite satisfaction that movement of goods was occasioned otherwise than as a result of sale. Assessee, aggrieved by the order of the appellate authority, filed appeal before the Tribunal. Tribunal also concurred with the view of the appellate authority and dismissed the appeal against which this revision has been preferred. 3. Sri Anil D. Nair, counsel appearing for the assessee, submitted that the Tribunal ought not have held that Form F is mandatory to prove transfer in the light of the decision of this court in Vijayamohini Mills v. State of Kerala (1989) 75 STC 63) and also the decision of the apex court in (2004) 134 STC 473). 3. Sri Anil D. Nair, counsel appearing for the assessee, submitted that the Tribunal ought not have held that Form F is mandatory to prove transfer in the light of the decision of this court in Vijayamohini Mills v. State of Kerala (1989) 75 STC 63) and also the decision of the apex court in (2004) 134 STC 473). Counsel submitted that the Tribunal ought to have allowed the appeal on the basis of the decision of the apex court in Ashok Leyland Ltd v. State of Tamil Nadu and another (2004) 134 STC 473). Counsel submitted that even in the absence of Form F declaration assessee produced other evidence to show that there was a stock transfer. Counsel referred to RG 24 register maintained under the Central Excise Rules and submitted that the register is the best evidence to prove the claim of stock transfer. Counsel also submitted that the assessee has also produced delivery notes which would support the case of the assessee that there was stock transfer. Counsel submitted, in any view of the matter as per Section 6A of the Central Sales Tax Act production of F Form was not mandatory. 4. Counsel appearing for the Revenue on the other hand submitted that burden is on the assessee to show that what was transferred is only stock transfer. Even if production of Form F declaration was not mandatory prior to the amendment, burden is entirely on the assessee to show that there was a stock transfer. RG 24 register produced is not conclusive proof of movement of goods from State of Kerala to Vizakapatanam; So also the delivery note produced. The apex court in Ashok Leyland Ltd v. State of Tamil Nadu (2004) 134 S.T.C. 473) has elaborately considered the history of the legislation as also the Constitutional Amendments in relation to inter-State movement of goods and Section 6-A of the Central Sales Tax Act. The court held as follows: “Indisputably, the burden would be on the dealer to show that the movement of goods had occasioned not by reason of any transaction involving sale of goods but by reason of transfer of such goods to any other place of his business or to his agent or principal, as the case may be. The court held as follows: “Indisputably, the burden would be on the dealer to show that the movement of goods had occasioned not by reason of any transaction involving sale of goods but by reason of transfer of such goods to any other place of his business or to his agent or principal, as the case may be. For the purpose of discharge of such burden of proof, the dealer is required to furnish to the assessing authority within the prescribed time a declaration duly filled and signed by the principal officer of the other place of business or his agent or principal. Such declaration would contain the prescribed particulars in the prescribed form obtained from the prescribed authority. Along with such declaration, the dealer is required to furnish the evidence of such dispatch of goods by reason of Act 20 of 2002. In the event, if it fails to furnish such declaration, by reason of legal fiction, such movement of goods would be deemed for all purposes of the said act to have occasioned as a result of sale. Such declaration indisputably is to be filed in form F. The did form is to be filled in triplicate.” After the coming into force of Act 20 of 2002 production of form F declaration is a mandatory requirement. Assessment in the instant case relates to 1999-2000. Before the coming into force of the amendment as per Act 20 of 2002, production of form F declaration was not mandatory. Statute however specifically casts the burden on the assessee under section 6A of the Central Sales Tax Act, 1956. The said Section is extracted below for easy reference. 6A. Burden of proof, etc. Before the coming into force of the amendment as per Act 20 of 2002, production of form F declaration was not mandatory. Statute however specifically casts the burden on the assessee under section 6A of the Central Sales Tax Act, 1956. The said Section is extracted below for easy reference. 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 no 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 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 dispatch of such goods 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.” When we read Section 6A of the Central Sales Tax Act along with Central Sales Tax (Registration and Turnover) Rules, 1957, burden of proof is on the assessee to show that there is a transfer of goods other than by way of sale. The question posed is whether Form RG 23A form produced by the assessee would clearly show that there was stock transfer of goods from State of Kerala to Vizhakapatanam. Form RG 23 A deals with stock account of inputs for use in or in relation to the manufacture of final products. This document as such would not show that there was movement of goods from Kerala to Vizhakapatanam. Form RG 23 A deals with stock account of inputs for use in or in relation to the manufacture of final products. This document as such would not show that there was movement of goods from Kerala to Vizhakapatanam. This is a form prescribed under Rule 57A of the Central Excise Rules framed in exercise of the powers conferred by Sections 6, 12 and 37 of the Central Excises and Salt Act, 1944 and maintained by the assessee itself. We are in this case concerned with the provisions of the Central Sales Tax Act, 1956 and the Central Sales Tax (registration & Turnover) Rules, 1957. Petitioner has to comply with the provisions of the Central Sales Tax Act and Rules framed thereunder and not the provisions of the Central Excise Act and the Rules framed thereunder. Declaration form under the Central Excise Rules is not reliable piece of evidence to show transfer of stock from one State to another. That document is not binding on the officers functioning under the Central Sales Tax Rules. Further counsel submitted that there is an entry in RG 24 regarding delivery notes. Assessee had not produced any reliable evidence to show that there was stock transfer from State of Kerala to Vizhakapatanam after passing through the check posts in the State. All the fact finding authorities have concurrently found that the assessee has not discharged the burden under Section 6A of the Central Sales Tax Act. We find no infirmity in the orders passed by the authorities below. Revision petition lacks merits and it is accordingly dismissed.