IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST Rev No. 512 of 2004()
1. STATE OF KERALA,
... Petitioner
Vs
1. A.YOUNUS KUNJU,
... Respondent
For Petitioner :GOVERNMENT PLEADER
For Respondent :SRI.ARIKKAT VIJAYAN MENON
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.M.JOSEPH
Dated :02/01/2008
O R D E R
H.L.DATTU, C.J. & K.M.JOSEPH, J.
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S.T.Rev.No.512 of 2004
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Dated, this the 2nd day of January, 2008
ORDER
H.L.Dattu, C.J.
The Revenue being aggrieved by the orders passed by the Kerala Sales
Tax Appellate Tribunal, Thiruvananthapuram in T.A.No.252 of 2002 dated 29th
June, 2002 is before us in this sales tax revision.
(2) The assessee is a dealer registered both under the provisions of the
Kerala General Sales Tax Act, 1963 (‘KGST Act’ for short) and the Central
Sales Tax Act, 1956 (‘CST Act’ for short).
(3) The assessing authority had completed the assessments under the
provisions of the CST Act for the assessment year 1988-89 by its order dated
23.2.1998. In the said assessment order, the assessing authority had rejected
the exemption claimed by the assessee on its consignment sales by producing
‘F’ Forms, solely on the ground that the ‘F’ Forms so produced by the
assessee are issued by bogus dealers using fictitious registration numbers.
(4) Aggrieved by the said assessment order, the assessee had carried
the matter in second appeal before the Tribunal in T.A.No.370 of 1999 . The
Tribunal after holding that the assessing authority without proper verification
and enquiry could not have come to the conclusion that ‘F’ Form declarations
produced by the assessee are bogus as issued by fictitious dealers and,
therefore, had directed the assessing authority to allow the claim of exemption
made by the assessee.
(5) After such remand, the assessing authority has passed yet another
order dated 25.7.2001 and has allowed the claim only in respect of the turnover
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of consignment sales which are supported by ‘F’ Form declarations. Aggrieved
by the said order of the assessing authority, the assessee was before the first
appellate authority, who by its order dated 18.3.2002 had rejected the
assessee’s appeal. The assessee had carried the matter by way of second
appeal before the Tribunal in T.A.No.252 of 2002. The Tribunal has allowed
the assessee’s appeal and has further directed the assessing authority to grant
the entire claim of the assessee on consignment sales. Aggrieved by the said
direction issued by the Tribunal, the Revenue is before us in this sales tax
revision.
(6) The Revenue has framed the following question of law for our
consideration and decision, The same is as under:
“Whether on the facts and in the circumstances of the
case the Tribunal is justified in directing the Assessing
Authority to allow the exemption claimed by the assessee in
respect of stock transferred to outside the State and held as
closing stock thee for which no ‘F’ Form was filed.”
(7) Sri.Mohammed Rafiq, learned senior Government Pleader
appearing for the Revenue, would submit that the Tribunal was not justified in
directing the assessing authority to allow the claim of exemption even on the
consignment sales which are not supported by ‘F’ Forms and, therefore,
requests this Court to set aside that portion of the order passed by the Tribunal.
(8) Per contra, Sri.Hari Sankar V.Menon, learned counsel appearing for
the assessee sought to justify the impugned order.
(9) In the earlier round of litigation, the Tribunal at paragraph 3 of its
order had stated as under:
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“Therefore, ‘F’ Form rejected by the assessing authority is not
proper and not in accordance with law. To prove that certain
dealers at Delhi are using fictitious registration numbers no
materials are collected by the assessing authority. No report is
collected to prove that the said ‘F’ forms are invalidated by the
assessing authority by any proceedings. Therefore, we are of
the view that the appellant has proved the claim of exemption
as per 6A(1) of the C.S.T. Act and Rule 12 by production of F
forms and the assessing authority has not proved by proper
enquiry as per Proviso 2 of Section 6(A) of the C.S.T. Act that
the entries in the ‘F’ forms are incorrect and the claim of
exemption to the consignment sales disallowed are wrong.
We, therefore, direct the assessing authority to allow the claim
of exemption.”
(10) A reading of the aforesaid paragraph would only indicate that the
Tribunal had directed the assessing authority to allow the claim of the assessee
in respect of the consignment sales which are supported by ‘F’ Form
declarations. However, in the last sentence of that paragraph, the Tribunal had
directed the assessing authority to allow the claim of exemption. The order
passed by the Tribunal, if it is read in toto, it only means that the Tribunal had
directed the assessing authority to allow the claim of exemption on the
consignment sales which are supported by ‘F’ Form declarations and not on the
claims made by the assessee without the support of any ‘F’ Form declaration.
The Tribunal by the impugned order has carried away by the last sentence in
paragraph 3 of the order to hold that the assessee is eligible and entitled for
exemption even on the consignment sales which are not supported by ‘F’ Form
declarations. This conclusion of the Tribunal, in our opinion, is contrary to the
observations and directions issued by them while disposing of T.A.No.370 of
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1999 dated 10th November, 2000. Therefore, the revision petition field by the
State requires to be allowed and the order passed by the Tribunal requires to
be set aside.
(11) Accordingly we pass the following:
ORDER
i) Sales tax revision is allowed.
ii) The direction issued by the Tribunal to allow the claim of the
assessee for exemption even on the consignment sales which are not
supported by ‘F’ Form declarations is set aside.
iii) Accordingly we answer the question of law framed by the Revenue in
the affirmative and against the assessee.
iv) However, liberty is reserved to the assessee, if he so desires, to
produce the ‘F’ Form declarations within two months from today before the
assessing authority in support of his claim for exemption for the assessment
year 1988-89. If such declaration forms are produced by the assessee, the
assessing authority shall take note of those forms and redo the assessment.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(K.M.JOSEPH)
JUDGE
vns