IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 06.03.2002
CORAM:
THE HONOURABLE MR.JUSTICE V.S.SIRPURKAR
AND
THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN
TAX CASE NO.292 of 1994
(Reference No.137 of 1994)
The State of Tamil Nadu
represented by the
Deputy Commissioner of Commercial Taxes
Madras (North)
Division, Greams Road,
Madras-600 006. ... Petitioner
Versus
Tvl.Khivraj Motors Limited
23, Mount Road, Madras-600 006. ... Respondent
Prayer: Revision Petition to revise the Order of the Sales Tax
Appellate Tribunal (Main Bench), Madras dated 26.02.1993 and passed in
Tribunal Appeal No.962 of 1992.
! For Petitioner : Mr.T.Ayyasamy, Spl.Govt.Pleader
(Taxes)
^ For Respondent : Mr.V.Ramachandran
: JUDGMENT
K.RAVIRAJA PANDIAN,J.
The revision is filed against the Order of the Sales Tax Appellate
Tribunal made in T.A.No.962 of 1992, whereby a turn over of Rs.27,20,4
91-35ps, which has been brought to tax under Central Sales Tax Act for the
assessment year 1970-71 by the Assessing Officer and confirmed by the
Appellate Authority has been reversed by the Tribunal.
2. The brief facts, which would help us in resolving the issue, are
as follows:
The respondent is a dealer in motor vehicles. For the year 1970-71,
they claimed exemption on a turnover of Rs.77,10,048/- as sales made outside
the state, out of which a turn over of Rs.25,466-71ps related to sale of
spares and the balance of Rs.76,84,581-59ps relates to sale of cars. The
place of business of the assessee was inspected on 28.8.1970 and 27.4.1971 by
the officials of the Enforcement Wing, Madras and recovered certain documents.
The examination of the accounts and documents disclosed that the exemption
claimed by the assessee as sale made at Nellore/Chittoor is not correct and
the sales were actually made at Madras. Out of the said turnover of
Rs.76,84,581-59 ps, the Assessing Officer considered turnover of
Rs.49,64,090-24ps as intra-State turnover and in respect of the balance
turnover of Rs.27 ,20,491-35ps, since no material was available, the Assessing
Officer presumed that the transaction would have been made to purchasers
outside the State and on that basis, the above said turnover of Rs.27,20
,491-35ps has been brought to tax under the CST. The said order was taken on
appeal. It was confirmed by the Appellate Authority. On further appeal, the
Appellate Tribunal reversed the finding. The correctness of the said order of
the Tribunal is now challenged in the present revision petition.
3. The learned Government Pleader appearing for the petitioner
assailed the order of the Appellate Tribunal on the ground that in respect of
the earlier year in 1969-70, for the very same assessee, this Court upheld the
order of the assessment and as such, this revision has to be allowed restoring
the order of the Assessing Officer. He further submitted that the assessment
has been made on the basis of the materials recovered at the time of
inspection from the place of premises of the dealer. Such an assessment was
upset by the Tribunal. Hence, the Order of the Tribunal requires interference
from this Court.
4. On the other hand, the learned counsel appearing for the
respondent/assessee has submitted that in respect of the TNGST assessment made
by the Assessing Officer over a turnover of Rs.49,64,090-24ps on the basis of
the very same inspection materials has been reversed by the very same order of
the Appellate Tribunal. That Order has been taken on revision by the
Department to this Court. After formation of the Special Tribunal under
Article 323-B of the Constitution of India, the revision filed by the
Department in respect of the TNGST turnover was transferred to the Special
Tribunal and the Special Tribunal taking into consideration of the materials
available has upheld the order of the Appellate Tribunal in respect of the
TNGST turnover. When that being the position, the CST turnover which has been
brought to tax only on presumption has been rightly set aside by the Appellate
Tribunal and that order requires no interference from this court.
5. The learned counsel further contended that the entire turnover of
Rs.77,10,048-30ps, which the respondent claimed as sales outside the State of
Tamil Nadu were brought to tax under the Andhra Pradesh General Sales Tax Act
(hereinafter referred to as the “APPGST Act”) as a sale within the State of
Andhra Pradesh and tax due thereon has been paid to the Andhra Pradesh State
and that order of the Tax Authority of Andhra Pradesh has been upheld by the
High Court and by the Supreme Court in S.L.P. In these factual position, it
is proved beyond doubt that the sale in respect of the turnover above said has
been done outside the State of Tamil Nadu and as such the order of the
Assessing Officer, which is based only on presumption has rightly been
reversed by the Appellate Tribunal, the fact finding authority, which requires
no interference.
6. We heard the arguments of the learned counsel on either side and
perused the material on record.
7. It is the case of the respondent/assessee that they are authorised
distributors of Ambassador cars for Madras and the Districts of Nellore and
Chittoor in Andhra Pradesh State under the Motor Cars ( Distribution and Sale)
Control Order issued under the Essential Commodities Act and it is the further
case of the respondent that they have separate branches in Nellore and
Chittoor. Orders were booked at the respective branches and the payments from
the customers are received by the respective branches. The various documents
maintained at the branches would prove that the cars were delivered after
registration either at Nellore or Chittoor, as the case may be. Further, the
various vouchers show that the cars were delivered to the customers by the
respective branches and therefore the turnover were sales of cars outside the
State of Tamil Nadu, not taxable under the State Act or C.S.T. The said case
of the respondent was rejected by the Assessing Authority on the ground that
the dealers received the cars at Madras undertook the work of registration by
obtaining necessary documents from the purchaser. The registration work was
prior to delivery of cars and the cars were delivered at Madras to the
concerned purchaser. Hence, the movement of cars to Chittoor and Nellore did
not arise and the sales amount to local sale within the State of Tamil Nadu.
8. In this revision, we are concerned only with the C.S.T assessment.
It is interesting to note that the CST assessment has been framed against the
respondent by the Assessing Officer in the following terms:
“It can be safely presumed that in as much as proof of delivery of the
goods at Madras is lacking in respect of a turnover of Rs.27,20,49 1-35, they
should have been moved to places outside the state as a result of the sale.
The transactions therefore attract liability to tax under the CST Act 1956.”
9. This reasoning of the Assessing Officer, which has been confirmed
by the Appellate Authority, has been reversed by the Tribunal, the highest
fact finding authority by recording reasons as follows:
“Assessment cannot be made on presumption. It must be
established that the goods in respect of this turnover moved to places outside
the State as a result of the sale. Absolutely there is no proof regarding
this. The finding of the Assessing Officer that it can be safely presumed
that inasmuch as proof of delivery of the goods at Madras is lacking in
respect of the disputed turnover they should have been moved to places outside
the State as a result of the sale cannot hold good. If there is lack of proof
in one angle, it cannot be shifted to the other angle. The Department must
establish that this turnover attracted assessment under CST. It is
significant to note that the goods were sold in Andhra Pradesh and sales tax
has been paid in Andhra Pradesh. The appellant has also given objections to
the notice stating that the appellants were assessed to sales tax by the State
of Andhra Pradesh and all the items covered in the pre-assessment notice
proposed to be assessed in the State of Tamil Nadu, have been included in the
assessment made in the State of Andhra Pradesh and the Andhra Pradesh
authorities had taken the view that the transactions are assessable at Andhra
Pradesh State and accordingly they assessed the turnover in the State of
Andhra Pradesh and as such there was no intention to evade payment of tax and
the entire transactions are recorded in their books of accounts. The
appellants have also stated that they have opened separate branches
Nellore/Chittoor and orders were booked by the respective branches and the
branches were registered under the Andhra Pradesh Sales Tax Act, having
registration numbers and independent character and payments were made by the
customers in their respective branches and entered in the accounts maintained
there and the cars were delivered from Nellore/Chittoor branches to the
customers and the turnovers were reported by the branches in the State of
Andhra Pradesh. So it is seen from the records that these transactions have
been assessed as local sales under the provisions of Andhra Pradesh Sales Tax
Act and proper accounts are also maintained by their branch offices
Nellore/Chittoor. So it cannot be stated that the turnovers liable for
assessment under CST Act. There is lack of proof with regard to delivery of
the goods at Madras. There are no documents to establish that the goods in
respect of the turnovers moved to places outside the State as a result of
sale. Absolutely there is no proof that the turnover is liable for assessment
under CST Act. Hence, we find that the assessment made on the disputed
turnovers under the CST Act is not sustainable and it is liable to be set
aside.”
(Italics by us)
10. We also find that there is absolutely no material to
prove that the cars are moved in pursuance of a contract of sale at Nellore or
Chittoor so as to bring the disputed transaction under inter-State
transaction. It is not the case of the petitioner that the documents
unearthed during the inspection proved that particular number of cars were
booked at Nellore/Chittoor in Andhra Pradesh State and pursuant to that
booking, the same number of cars were moved from Madras office of the
respondent to the Branch Office at Nellore/Chittoor so as to rope in those
transactions within the ambit of Section 3(a) of the C.S.T. Act. The
reasoning given by the authorities is that the assesses claimed exemption over
a turnover of Rs.77,10,048/- as sales outside the State and out of which a
turnover of Rs.25,466-71ps related to sale of spare parts out of the balance
turnover of Rs.76,84,581-59 ps, a turnover in Rs.49,64,090-24ps has been
proved to be local sales at Madras and remaining turnover of Rs.27,20,491-35ps
presumed to be inter-State transaction. We cannot approve this sort of
presumption to the turnover under C.S.T. No other materials are made
available before us except the orders of the authorities under the Sales Tax
Act. In the absence of any other materials made available to us so as to take
a different view than the one taken by the Appellate Tribunal, we refrained
ourselves from interfering with the order under revision.
11. It is well settled that the onus lies on the Revenue to disprove
the contention of the dealer that a sale is outside the State and to show that
it is an inter-State sale. This is what the Supreme Court has held in
COMMISSIONER OF SALES TAX VS. SURESH CHAND JAIN reported in 70 S.T.C. 45.
However, in the present case, except the above presumption as observed by the
Appellate Tribunal, no material worth mentioning has been shown by the
Assessing Authority to come to the conclusion that the turnover, which is in
dispute in the revision, is an inter-State turnover.
12. The learned counsel appearing for the respondent also produced
the assessment order in respect of the assessment year 1970-71 dated 3
1.12.1973 made by the proceedings of the Commercial Tax Officer, Gudur,
wherein the entire turnover of Rs.76,23,482-71ps has been assessed to tax
under the APGST. This turnover tallies with the turnover of Rs.76,84,581-59
which was brought to tax under the TNGST and CST put together in Tamil Nadu,
with a negligible variance. Hence, it is proved that the entire transaction
has been accounted for and tax has been paid in the Andhra Pradesh state.
13. In respect of the TNGST assessment, the Special Tribunal has
upheld the order of the Appellate Tribunal by recording reasons to the
following effect:
“We have examined the rival submissions and perused the records
produced before us. We find considerable force in the contention of Mr.
V.Ramachandran, counsel for the assessee. One cannot forget the fact during
the years 1969-70 and 1970-71 only Ambassador Cars were available and there
was always a long queue of purchasers. Naturally people wanted to get
priority by booking through lean centres like Nellore and Chithoor. The
evidence no doubt discloses that people in Madras and other places gave
addresses in Nellore or Chittoor to book cars. It is not disputed that the
cars were taken to Nellore and Chithoor to register them in the name of the
applicants. It is not disputed that sales tax was paid in Andhra Pradesh
State. To complete the formality the assessee took on themselves the
formality of registration etc. and then brought back the cars to Madras to
physically deliver them to the parties. This is an arrangement between the
parties to get over the Control Order. But legally, the cars were sold in
Nellore or Chithoor where the registration took the Motor Vehicles Act took
place. The persons who booked the cars from those centres became owners.
Thereafter it was only an arrangement to bring the cars to Madras and it will
not have any relevance to the contract of sale. It will be appropriate at
this stage to look at the statement of the Manager, Mr.M.K.Hussain.
Says the manager,
“Our day book, ledger and other account books, relating to car sales
are being maintain at H.O. Madras. The procedure for car booking is the
party has to submit application forms in duplicate together a S.D.book for
Rs.2,000/- and this office will forward the documents to Head Office for
necessary entries in the record books and the duplicate form will be returned
the party with priority number from here.
The vehicles will be delivered according to priority numbers from this
office. The value of the vehicle can be paid by cheques Draft or cash for
which receipt will be given to the party by Head Office or Branch. They
maintain separate accounts for this office at Nellore.”
Therefore, much significance cannot be attached to the scant records
and small offices maintained at Nellore and Chittor. The elaborate reasons
given by the assessing authority for the 220 cases in 1970-71 and 64 cases in
1969-70 fit in with the above explanation of the manager and the legal
interpretation given by us to the Control Order and the modus operandi used by
both parties.
In fine, we uphold the order of the Sales Tax Appellate Tribunal that
the subject sales are not exigible to tax under TNGST Act 1959. The revisions
filed by the Government are dismissed.”
(Italics by us)
This finding of fact arrived at by the Appellate Tribunal has been
confirmed by the Special Tribunal in respect of TNGST Act has statutorily
become final.
14. The learned Government Pleader submitted that the Appellate
Tribunal though stated in an elaborate fashion, that as seen from the records
that these transactions have been assessed to local Sales Tax at Andhra
Pradesh State and proper accounts are also maintained by the branch offices in
Nellore and Chittoor is not correct and no such materials were produced before
the Tribunal.
15. We are afraid, we cannot approve of this argument of the
Government Pleader on the simple ground that the argument contrary to the
statement in the judgment cannot be taken note of unless the contrary is
proved, that too at the revisional stage. Useful reference may be had to the
decision of the Supreme Court TAMIL NADU ELECTRICITY BOARD VS. SUMATHI
reported in 2000(4) S.C.C. 534. The Appellate Tribunal specifically stated
that it is seen from the records that these transactions have been assessed to
local tax under the provisions of the Andhra Pradesh General Sales Tax Act and
proper accounts are also maintained by their branch offices at Nellore and
Chittoor. The argument advanced by the Government Pleader cannot be accepted
at the revisional stage when the final fact finding authority has come to the
conclusion on facts that the accounts were maintained by the Branch Offices at
Nellore and Chittoor and the transaction was assessed to tax under APGST Act.
As stated already, the learned counsel also produced the assessment made for
the relevant assessment year under the A.P.G.S.T. Act. Incidentally, the
Special Tribunal has also in respect of the TNGST turnover, after perusing the
record produced before the Tribunal, upheld the order of the Appellate
Tribunal as extracted supra. Hence, the finding of fact reached by the fact
finding authorities cannot be interfered with at the revisional stage,
particularly when there is no materials contra available to disagree with the
same.
16. The other contention of the learned Government Pleader that in
respect of the earlier assessment order, this court has upheld the assessment
made by the Assessing Authority in the case of KHIVRAJ MOTORS (P) LTS. VS.
STATE OF TAMIL NADU reported in 106 S.T.C. 400 by itself cannot be a reason
to allow this revision. In that case, the three authorities including the
Sales Tax Appellate Tribunal, the highest fact finding authority, have found
against the assessee/dealer and the revision filed by the assessee has been
rejected by this Court. One of the reasons given by this court is as follows:
“Regarding the contention that, on the footing that those sales were
inside sales in Andhra Pradesh, they were actually assessed to tax by the
Andhra Pradesh authorities and the assessment had even become final since the
matter had been concluded even by the Andhra Pradesh High Court in revision,
we must state that even though the copies of the orders of the Andhra Pradesh
Sales Tax Appellate Tribunal and the High Court of Andhra Pradesh produced
before us show that the sales involved therein were held to be sales within
Andhra Pradesh the said orders relate not simply to the present assessment
year 1969-70, but relates to four assessment years, viz., 1969-70, 1970-71,
1971-72 and 1972-73 and, in regard to assessment year 1969-70, the turnover
involved before the Andhra Pradesh Sales Tax Appellate Tribunal was Rs.16
,96,044.61. In the above circumstances, we cannot assume that the above
referred to turnover of Rs.16,96,044.61 has any correlation with the turnover
in question in the present case in relation to the said assessment year
1969-70 only, viz., the above said turnover of Rs.4,3 9,686. For this reason
itself, we cannot place reliance on the abovesaid orders of Andhra Pradesh
Tribunal and the Andhra Pradesh High Court.”
The facts of the present case are not as stated above. The exemption
claimed on the turnover of Rs.77,10,048-30ps as outside sale has been roped in
by the Assessing Officer under TNGST and CST. The turnover thus roped in for
taxation is correlatable to the turnover reported in the books of account of
the assessee and offered to tax under APGST Act. This is the precise reason
given by the Appellate Tribunal, the highest fact finding authority in their
order that “it is seen from the records that the transactions have been
assessed as local tax under the provisions of APGST and proper accounts were
also maintained by the Branch Office in Chittoor.” Hence, the reliance on the
judgment of KHIVRAJ MOTORS (P) LTS. VS. STATE OF TAMIL NADU reported in 106
S.T.C. 400 cannot be had to this case on the factual situation of the present
case. This additional fact makes an ocean of difference in the conclusions
reached in the reported case. Each assessment year is a unit by itself. It
cannot be said that the transaction of dealer for different assessment years
would be identical or same. The pattern of sale may vary depending upon the
demand of the goods in a given year. Useful reference can be had to the
decision of the Supreme Court in HARYANA FINANCIAL CORPORATION AND ANOTHER VS.
M/S. JAGDAMBA OIL MILLS AND ANOTHER reported in 2002(1) JUDGMENT TODAY
S.C.482, in which the Supreme Court held as follows:
“Courts should not place reliance on decisions without discussing as
to how the factual situation fits in with the fact situation of the decision
on which reliance is placed. Observations of Courts are not to be read as
Euclid’s theorems nor as provisions of the statute. These observations must
be read in the context in which they appear. Judgments of courts are not to
be construed as statutes. To interpret words, phrases and provisions of a
statute, it may become necessary for judges to embark into lengthy discussions
but the discussion is meant to explain and not to define. Judges interpret
statutes, they do not interpret judgments. They interpret words of statutes,
their words are not to be interpreted as sta tutes.”
The Court further held as follows:
“The following words of Lord Denning in the matter of applying
precedents have become locus classicks:
“Each case depends on its own facts and a close similarity between one
case and another is not enough because even a single significant detail may
alter the entire aspect. In deciding such cases, one should avoid the
temptation to decide cases (as said by Cordozo) by matching the colour of one
case against the colour of another. To decide, therefore, on which side of
the line a case falls, the broad resemblance to another case is not at all
decisive.”
xxx xxx xxx
“Precedent should be followed only so far as it makes the path of
justice, but you must cut the dead wood and trim off the side branches else
you will find yourself lost in thickets and branches. My plea is to keep the
path to justice clear of obstructions which could impede it.”
17. In view of the discussion as stated above, we are declined to
interfere with the finding of fact at the revisional stage.
Hence, the revision is dismissed. However, there is no order as to
costs.
(V.S.S.,J.) (K.R.P.,J.)
06.03.2002
Index:Yes
Website: Yes
usk
To:
1. The Chairman,
Sales Tax Appellate Tribunal
(Main Bench)
Madras,
2. The Deputy Commissioner (C T)
Madras (North Division)
CT Admn. Building
III Floor, Madras-6.
3. The Assistant Commissioner (C T)
Central Assessment Circle-III
Madras.
06.03.2002