INDIAN RAYON AND INDUSTRIES LIMITED Vs. COMMERCIAL TAX OFFICER, MYLAPORE ASSESSMENT CIRCLE, CHENNAI AND OTHERS

JUDGEMENT

(1.) This writ petition is directed against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, dated October 1, 2001. The brief facts leading to the writ petition are as follows :

(2.) The petitioner-company (hereinafter referred to as, "the assessee") is incorporated under the Companies Act, 1956 and has its registered office at Gujarat. The assessee is engaged in the manufacturing and marketing of cement under the style of "Rajashree Cement". The assessee also has its place of business for stocking and selling cement at Pondicherry. During the year 1996-97, the assessee transferred cement valued at Rs. 46,57,600 for sales to Pondicherry, which was handled by the clearing and forwarding agents of the assessee at Pondicherry. Hence the assessee, on the ground that the goods moved to Pondicherry where sold at Pondicherry, submitted the returns claiming exemption of sales tax by reason of stock transfer. The said claim was rejected by the assessing officer, namely, the Commercial Tax Officer, Mylapore Assessment Circle on the ground that the transfers to Pondicherry were occasioned by way of inter-State sale falling under section 3(a) of the Central Sales Tax Act, 1956. The claim was initially for the alleged stock transfer to three places, namely, Tirupathi branch, Cochin branch and Pondicherry branch. After notice, the assessment was confirmed by the order dated December 31, 1999. Aggrieved by the said order, the assessee approached the Appellate Assistant Commissioner (CT)-IV, Chennai. So far as Tirupathi branch is concerned, the Appellate Assistant Commissioner set aside the disallowance order of the assessing officer and so far as Cochin branch is concerned, the Appellate Assistant Commissioner remanded the matter back to the assessing officer, but confirmed the assessment order regarding the movement of goods to Pondicherry on the ground that it was an inter-State sale. The Appellate Assistant Commissioner also deleted the levy of penalty. Again that order was questioned by way of further appeal before the Tribunal, which confirmed the order of the Appellate Assistant Commissioner. Hence the present writ petition.

(3.) Mr. N. Prasad, learned counsel appearing for the petitioner, would contend that the assessee had only stock transferred the cement from its branch to Pondicherry and the rinding of the authorities below that the transfer of cement to Pondicherry was occasioned by reason of sale is totally unsustainable, particularly in the absence of any contra evidence. In any event, the learned counsel would submit that every transfer should be dealt with independently. When the assessee had filed form F declarations and had discharged its initial burden, levy of sales tax for the entire quantity of 2,242 metric tonnes is totally unsustainable as, even according to the respondents, only 276 metric tonnes of cement were sought to be transferred on the date of inspection conducted on October 27, 1997. For the rest of the quantity, there is neither any material nor individual consideration in the impugned orders. Hence the impugned orders are liable to be set aside.