ELGI FINANCE LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THE appellant has filed these three appeals for the assessment years 1993 -94, 1994 -95 & 1995 -96 against the orders of the Appellate Deputy Commissioner (CT), Kurnool. We are passing a common order in all these three appeals, since the issues involved and the appellant are the same. M/s. Elgi Finance Limited, Coimbatore, were assessed to tax by the Commercial Tax Officer, Puttur, for all the three years for the sale of machinery and equipment to M/s. Parkins Textiles Limited, Nagari, who are registered dealers on the rolls of Commercial Tax Officer, Puttur. M/s. Elgi Finance Limited are not registered dealers in the State of Andhra Pradesh, so they have been assessed as casual traders by the Commercial Tax Officer. On perusal of a hire purchase agreement between M/s. Elgi Finance Limited and M/s. Parkins Textiles Limited, the C.T.O., discovered that M/s. Elgi Finance Limited, who described themselves as financiers have been described as owners of the machinery in these agreements during these three assessment years. In other words, M/s. Parkins Textiles Limited, have hired certain second hand machinery from M/s. Elgi Finance Limited, Coimbatore. The date of agreement and the date of delivery in all cases is the same leading to the belief that the goods when hired by M/s. Parkins Textiles Limited, Nagari, were located in the State of Andhra Pradesh, though, the agreement has been signed at Coimbatore. The C.T.O., concluded that there had been a deemed sale of machinery by M/s. Elgi Finance Limited. Therefore, M/s. Elgi Finance Limited are liable to pay duty under the provisions of the APGST Act, 1957. The appellant disputed this fact and went in appeal against the orders of the C.T.O., Their appeals, however, were dismissed by the Appellate Deputy Commissioner (CT), Kurnool. Hence, they have filed appeals before us.

(2.) IT is the contention of the appellant that they are only financiers, who have financed or lent money to M/s. Parkins Textiles Limited, to buy second hand machinery to hire for their use. They have also contended that this second hand machinery had moved into the State of Andhra Pradesh from other States and that because this was an interstate transaction they were not liable to pay any tax under the APGST Act, 1957. The appellants have, however, failed to produce before us any evidence to show the movement of goods in question from other States to the State of Andhra Pradesh. They have produced some invoices/bills/receipts. From these receipts, it is clear that some of the second hand machinery has been bought by M/s. Parkins Textiles Limited and some have been sold by them to other parties. There is some correspondence from M/s. Elgi Finance Limited to M/s. Parkins Textiles Limited, which suggests payment of certain amounts through cheque for some machinery to be purchased by M/s. Parkins Textiles Limited. The correspondence also shows that certain amount had been deducted by M/s. Elgi Finance Limited, towards initial payment to be mad by M/s. Parkins Textiles Limited. Some correspondence also shows requests made by M/s. Parkins Textiles Limited to M/s. Elgi Finance Limited, requesting for finance for humidification plant and some other machines. The appellant has relied on the judgment of the Hon'ble Supreme Court in the case of 20th Century Finance Corporation Limited and another vs. State of Maharashtra : (2000) 119 STC 182.

(3.) THE question for consideration that comes up before us is whether M/s. Elgi Finance Limited, are to be treated as sellers of second hand machinery to M/s. Parkins Textiles Limited in the State of Andhra Pradesh and taxed accordingly under the APGST Act, 1957.