STATE OF TAMIL NADU Vs. VAN VANASPATHY UDYOG

JUDGEMENT

(1.) THE department is the petitioner herein. In the place of business of the assessee there was an inspection by the Enforcement Wing on September 25, 1980. A verification of the records reveals that exemption was claimed to an extent of Rs. 1, 84, 336.80 on the following transactions as sales under Section 6(2) of the Central Sales Tax Act, 1956. E. 1 sales is not in order. THE first transaction relates to invoice No. VVU/MDS/58, dated July 17, 1980, for Rs. 31, 039.10. THE assessee had clear the goods through the clearing agent and delivered locally as per the delivery challan No. 58 dated July 17, 1980, issued and the direction given to the clearing agent in accordance with their letter dated July 18, 1980 and the payment receipt obtained from the clearing agent. It has been specifically stated in the letter to clear the consignment, arrange to deliver the same at their godown at Royapuram as usual. THE second addition of Rs. 1, 53, 297.70 relates to invoice No. VVU/MDS/68, dated August 8, 1980. According to the assessing officer, in this case, the goods were delivered locally as per the delivery challan No. 68/8-8-1980. According to the assessing officer goods sold is not the same as mentioned in the purchase bill. In the purchase bill the grade of the goods has been noted as "opague" whereas in the sale bill it has been noted as K.H.D. On the basis of these abovesaid two invoices, the assessing officer made the above two additions. On appeal, the Appellate Assistant Commissioner confirmed the order of the assessing officer since according to the Appellate Assistant Commissioner both the transactions relate to local sale and not sale in transit.

(2.) AGGRIEVED, the assessee filed appeal before the Appellate Tribunal. The Appellate Tribunal considered that both these items of sales are not local sales but sales in transit. Therefore, the Tribunal deleted both the additions relating to the abovesaid transactions. It is against this order, the department is in revision before this Court. The principle of law that has to be followed in a matter like this has been stated by this Court in the decision reported in the case of State of Tamil Nadu v. N. Ramu Bros. (Electricals) 1993 (89) STC 481. In 1993 (89) STC 481 [State of Tamil Nadu v. Ramu Bros. (Electricals)] cited supra it has been stated as under:

(3.) ON the other hand the learned counsel appearing for the assessee submitted that the sale took place during transit. The goods were cleared even though by the agent of the assessee, but it was cleared on behalf of the purchaser. According to the learned counsel for the assessee this is a common practice prevalent in this line of trade. Hence it was submitted that the Tribunal was correct in holding that the sale took place during transit and exemption under section6(2) of the Central Sales Tax Act would be applicable.