ASHOKA SWEETS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The assessee is on revision before this court as against the order of the Tribunal. The assessment year under consideration is 1993-94. The assessee herein, by name, Ashoka Sweets had a business in confectionery and sugar candy. The petitioner has a sister concern, by name, Ashoka Confectionary, registered as a dealer in Kerala. The assessee had an agency agreement with the sister concern, Ashoka Confectionary, which has an office at Pollachi as well as in Kerala. The petitioner transferred the goods to the agent, Ashoka Confectionary, who moved the goods from Pollachi to Kerala in its own vehicle for effecting sales in Kerala. The case of the assessee is that the agent furnished periodical sale pattials to the assessee herein apart from the statutory form F. Based on the details in form F, sale pattials, ledger extract of the principal herein as well as the agent, the assessing authority accepted the case of the assessee that the claim fell under section 6A of the Central Sales Tax Act, entitled to exemption. Thus the assessee's claim on a total and taxable turnover of Rs. 12,01,300 was accepted and an assessment was completed by the assessing authority on November 30, 1994 granting exemption under section 6A of the Central Sales Tax Act. Subsequent thereto, the assessment was sought to be reopened on the ground that the consignee had taken delivery of the goods at Pollachi itself and that the movement of goods were noted in form XX delivery note as movement to "our branch". The assessing officer viewed that when the assessee had no branch in Kerala, the claim of the assessee has consignment sales could not be accepted. He further viewed that as the agent had taken possession in this State itself and only thereafter moved the same in its vehicle, the same amounted to a sale within the State assessable under the Tamil Nadu General Sales Tax Act. Thus the assessing authority proposed to withdraw the exemption granted under section 6A of the Central Sales Tax Act and treated the sales as local sales, assessable under the Tamil Nadu General Sales Tax Act. The assessee objected to the said proposal. However, the assessing officer confirmed the proposal for reassessment under the provisions of the Tamil Nadu General Sales Tax Act treating the entire turnover as local sale.

(2.) Aggrieved by the same, the assessee preferred an appeal before the Appellate Assistant Commissioner, who, in turn, pointed out that form XX delivery notes contained the specific remark as "stock transfer to our branch". Thus if the goods were actually transported by the assessee to the agent, then they should have mentioned the destination point as "consignment stock to the agent". Admittedly, the assessee did not have a branch in Kerala. The first appellate authority pointed out that it was not known as to why the assessee had mentioned in form XX the word "our branch". In the light of the above, the first appellate authority held that the transactions were assessable under the provisions of the Tamil Nadu General Sales Tax Act. The first appellate authority also rejected the plea of the assessee that they had offered the turnover for assessment before the Kerala authorities. The first appellate authority further pointed out that the assessee had not produced the trip sheet or other records relating to the movement of goods. The vehicle also did not have the necessary route permit to travel to Kerala. The first appellate authority further pointed out that the agreement did not contain any clause as regards the transportation of the goods as well as for payment of commission. Thus, going through the materials, the first appellate authority rejected the case of the assessee, thereby confirmed the assessment. The assessee went on further appeal before the Tribunal, which once again confirmed the view of the Appellate Assistant Commissioner and dismissed the appeal. Aggrieved by the same, the present revision has been filed by the assessee.

(3.) The learned counsel appearing for the petitioner pointed out that barring the agent taking delivery within the State, there are hardly any materials for the Revenue to doubt the genuineness of the claim of the assessee. He further pointed out that the agent was a registered dealer in Kerala. He also had an office at Pollachi. Form XX, which contained the seal of Tamil Nadu check-post, Kerala check-post as well as the Revenue check-post, indicated that the goods had, in fact, crossed over to Kerala as that of the petitioner and that the Ashoka Confectionary was only an agent for effecting sales in Kerala. Considering the fact that form XX contained the name of the consignor and the consignee, the reference as to the "consignment stock transfer to our branch", has to be read in as with reference to the consignee and not having any relevance to the petitioner-consignor. He further pointed out that when in the original assessment, the assessing authority had satisfied himself as to the claim of the assessee by verifying the details in form F, apart from the agreement on payment of commission as well as the accounts of the assessee as well as that of the agent, in the absence of any other material to discredit the details in form F, the claim could not be rejected under section 16 proceedings. He further pointed out that there are no materials to doubt the truthfulness of the contents in form F. Thus, applying the decision of the Supreme Court reported in Ashok Leyland Ltd. v. State of Tamil Nadu, 2004 134 STC 473 , the re-assessment proceedings are illegal and could not be sustained.