RALLIS INDIA LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE petitioners in T. C. No. 158 of 1981 were finally assessed to tax on a turnover of Rs. 1, 13, 093. 37 under the Central Sales Tax act, 1956, hereinafter referred to as "the CST Act" for the year 1975-76 in the proceedings of the Deputy Commercial Tax Officer dated January 31, 1977. By notice dated July 4, 1978, the assessing authority stated that a turnover of Rs. 38, 34, 611. 95 being the sale value of ossein effected by the petitioners to M/s. Rallis India Ltd. , Bombay (for short "ril, bombay"), during the year 1975-76 had escaped from assessment and therefore it was proposed to assess the said turnover under the CST Act. THE petitioners by their letter dated August 2, 1978, contended that the movement of goods from Uthagamandalam to Cochin was not occasioned in pursuance of orders received from M/s. RIL, that in any event M/s. RIL, should be considered as their agent and lastly that the sale had taken place on the high seas after the vessel had crossed the customs frontier. By another notice dated January 21, 1980, it was proposed to assess the said turnover at 10 per cent and the petitioners were called upon to submit their objections. In the objections, the petitioners contended that the goods, ossein, were only stock transferred to cochin branch and that they remained unascertained goods at the point of transfer and that at the time of movement, there was no specific concluded agreement. Alternatively, it was contended that the sales were export sales. THE assessing authority rejected the objections and held that the turnover was liable to be taxed under section3 (a) of the CST Act at 10 per cent in respect of the turnover of Rs. 25, 92, 061. 83. In respect of the turnover of Rs. 1, 42, 550. 12, the rate of 4 per cent was applied because valid "c" form declarations had been filed. On appeal to the Appellate Assistant Commissioner, it was held that the goods moved from Uthagamandalam to Cochin only in pursuance of the contract of sale entered into between the petitioners and RIL, bombay, but the matter was remanded back to the assessing authority to entertain "c" forms by giving opportunity to the petitioners. On further appeal, the Tribunal confirmed the order of the Appellate Assistant commissioner. It is this order of the Tribunal dated October 30, 1980, which is before us in Tax Case (Revision) No. 158 of 1981. 1 (a ). THE Tax Case (Revision)No. 374 of 1981 relates to the assessment year 1974-75. In that case also by a notice dated May 9, 1978, it was proposed to reopen the assessment and tax a turnover of Rs. 44, 41, 542. 27 being similar riles effected to RIL. THEre also similar replies were given but in that case "c" form declarations were accepted and the turnover was taxed at 4 per cent. THE appeal before the appellate Assistant Commissioner and the Tribunal having failed, the above Tax case (Revision) No. 474 of 1981 has been filed. By an order dated November 21, 1986, made in TCMP No. 529 of 1986, cause-title in Tax Case (Revision) No. 474 of 1981 has been amended by making Rallis India Limited as petitioners.

(2.) MR. C. Natarajan, learned counsel for the petitioners places reliance on the following circumstances to contend that no particular sale or purchase occasioned the movement of goods from Uthagamandalam to cochin, and therefore section3 (a) of the CST Act is not attracted : (1) The petitioner-company has a branch office at Cochin which is also registered under the Kerala General Sales Tax Act. (2) For the goods manufactured, namely, ossein, the petitioner has no place of storage except in Cochin. (3) The dispatches from Uthagamandalam are regular as and when the goods are produced, the despatches are not relatable to any purchase orders. The modus operandi of the transfer of goods from Uthagamandalam to Cochin was that the goods had been consigned showing the consignee as "ppi, Cochin" in the transfer challan and form XX. The goods are not earmarked in any document as if it is for any particular purchaser. (4) The goods being stocked in standard polythene covers with outer gunny bags, are marked and stencilled only at Cochin after receipt of an export order or a sale order. The remarks of the assessing authorities that a copy of the delivery challan had been marked in every case to RIL, Bombay, has no bearing on the issue because the forms used were printed forms from the days when RIL, promoted the petitioner-company. Subsequent forms do not contain the said clause. (5) The order of the Maritime Collector of central Excise and Customs dated December 21, 1979, would clearly show that there was no correlation between the delivery challans and the shipping bills or customs documents either for the quantity or in respect of the period of shipment. This suggests that the movement of goods was not against any particular order.

(3.) GLENROCK Wood and Allied Enterprises v. State of Tamil nadu 1975 (4) CTR 255, 1975 (36) STC 316 (Mad.) is relied on for the purpose that the conduct of the assessee in obtaining "c" forms would not preclude the assessees from contending that they were not inter-State sales and that the goods had been transported by way of branch transfers. Similarly, commissioner of Sales Tax v. Suresh Chand Jain 1988 AIR (SC) 1197, 1988 (2) JT 81, 1988 (70) STC 45, 1988 (1) Scale 693, 1988 (S) SCC 421, 1988 (3) SCR 446, 1988 SSCC 421 (SC), is relied upon for the contention that merely because transfer permit was applied for from the Forest Department, it cannot be presumed that there was inter-State sale. The said decision is also authority for the proposition that the onus lies on the Revenue to disprove the contention of the appellant that the sales in question were not inter-State sales.