STATE OF KERALA Vs. CROMPTON GREAVES LTD

JUDGEMENT

(1.) The question raised in the revision filed by the State is whether the Tribunal was justified in holding that mere production of C Forms is sufficient proof of interstate sales. We have heard Government Pleader for the petitioner and counsel appearing for the respondent.

(2.) The respondent is a reputed company engaged mostly in the sale of products manufactured by them. Manufacturing facilities are outside Kerala and the local office is only a selling Branch engaged mostly in local sales. During the year 1999-2000, respondent accounted interstate sales to the tune of Rs.87,34,475/- to Mahe. Even though C Forms were produced to claim concessional rate, the Assessing Officer demanded from the respondent proof of transport of goods from the depot in Kerala to the buyer in Mahe, which respondent failed to produce and consequently C Forms filed were rejected and the turnover was assessed under the local Sales Tax Act. Even though first round appeals were dismissed, the Tribunal merely based on the C Forms produced by the respondent and based on observation in a judgment of this Court, allowed the appeals against which this revision is filed by the State.

(3.) The Government Pleader relied on Division Bench decision of this Court in Renuka Agencies v. Intelligence Officer, 2008 (16) KTR 501 and contended that mere production of C Form is not sufficient evidence of interstate sale. On several occasions this Court had considered cases relating to tax evasion practised by dealers by using Mahe, part of the Union Territory of Pondicherry located within Kerala. Going by the findings in several judgments, there is nothing wrong in the Assessing Officer doubting genuineness of the transactions of interstate sale and asking for clear proof about movement of goods from Kerala to outside State for accepting interstate sales. Besides this, two types of interstate sales are covered by S.3(a) and S.3(b) of the CST Act. While clause (a) of S.3 deals with sale occasioning interstate movement of goods, clause (b) deals with sale in the course of movement of goods from one State to another by endorsement of document of title to goods. In either cases, there should be physical movement of goods from one State to another and the same will be evident from transport document such as Lorry Receipt, Railway Receipt or such other goods vehicle record pertaining to transport of goods. We do not know what prevented the respondent from producing documents of transport of goods from their depot at Cochin to Mahe which is north of Cochin by around 250 kilometres. In fact, if goods are physically transported from Cochin to Mahe, then the details of such transport would find entry in the Entry Check Post maintained by Sales Tax Department at Mahe. Therefore, in our view, there is no justification for the respondent's failure to produce proof of transport from Cochin to Mahe.