HANSA OVERSEAS ENTERPRISES Vs. STATE OF A P

JUDGEMENT

(1.) THIS revision, under Section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957 (APGST Act), is against the order of the Sales Tax Appellate Tribunal, Hyderabad, (STAT for short), in T.A.No.374 of 2006 dated 8.7.2010.

(2.) THE petitioner, a partnership firm carrying on business in the manufacture and export of leather garments, is a registered dealer under the provisions of the APGST Act, the Central Sales Tax Act, 1956 (CST Act), and an assessee on the rolls of the Commercial Tax Officer, Mehdipatnam Circle, Hyderabad. For the assessment year 1999-2000, the petitioners assessment was completed vide proceedings dated 22.4.2002 accepting their claim for exemption of the entire turnover of Rs.5,90,48,192.00 as export sales. Exercising powers under Section 20(2) of the APGST Act, and Section 9(2) of the CST Act, the Deputy Commissioner (CT), Charminar Division, Hyderabad, vide proceedings dated 25.9.2004, proposed to revise the order of the assessing authority. THE turnover of Rs.63,98,197.00, representing sale of Duty Entitlement Pass Book (DEPB) licenses, was proposed to be subjected to tax at 10% as inter-state sales under the CST Act on the ground that they were not covered by Form C declarations. As the petitioner did not file their objections to the show cause notice, a revisional order was passed on 12.5.2005 confirming the earlier proposal to levy tax. Aggrieved thereby, the petitioner filed an appeal in T.A. No.374 of 2006 and, on its being dismissed by the STAT on 8.7.2010, the present revision is filed under Section 22(1) of the APGST Act.

(3.) THE question which, therefore, necessitates examination is whether the STAT was justified in drawing inference, and in coming to the conclusion, that the sale transactions in question were inter-state sales or whether the findings of the STAT in this regard are based on mere surmises and are perverse. As the order of the STAT is under challenge in these proceedings, it is wholly unnecessary for us to note the contents of the order of the Revisional authority. It must be borne in mind that theTribunal is the final fact-finding body. Its findings on questions of fact are not liable to be interfered with unless it has taken into consideration irrelevant material or has failed to take into consideration relevant material or the conclusion arrived at by it is perverse in the sense that no reasonable person, on the basis of the facts before the Tribunal, could have come to the conclusion to which the Tribunal has come. THE decision of the Tribunal has not to be scrutinised sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on record has not been noticed by the Tribunal in its judgment. If the Court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material, and has not taken into account irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with unless, of course, the conclusions arrived at by the Tribunal are perverse. (CIT v. Karam Chand Thapar and Bros. (P) Ltd. (1989) 2 SCC 31). Under S. 3(a) of the CST Act, a sale or purchase of goods is deemed to take place in the course of inter-State trade or commerce if the sale or purchase occasions movement of goods from one State to another. A sale, by definition, being transfer of property becomes taxable under Section 3(a) if the movement of goods from one State to another is under a covenant, or an incident, of the contract of sale, and the property in the goods passes on to the purchaser. (Tata Iron and Steel Co. Limited, Bombay v. S.R. Sarkar (1960) Vol.11 STC 655). If the movement of goods from within the State is occasioned by the order placed by the buyer, or is an incident of the contract of sale, its movement from the very beginning, all the way until delivery is taken by the buyer, is an inter-State movement. (Sahney Steel and Press Works Ltd v. Commercial Tax Officer (1985) 60 STC 301; English Electric Company of India Ltd. v. THE Deputy Commercial Tax Officer (1976) 38 STC 475; Union of India v. K.G. Khosla and Co. Ltd (1979) 43 STC 457). In its order, in T.A.No.374 of 2006 dated 8.7.2010, the STAT held that the DEPB scrips were sold by the petitioner to M/s. Goel Enterprises at Noida in Uttar Pradesh, M/s. Tirumala Re-rolling (P) Ltd, Jetpur, Gujarat and M/s. AKM Enterprises, Chennai in Tamilnadu; licenses were sold to various persons in three different corners of the country; it was unimaginable that the petitioner would send their representative, carrying DEPB licenses, to three different places, who would then await a suitable buyer in those places; no documentary proof of the fact that the movement of goods preceded the sale had been provided; copies of letters of buyers, who had stated that they had purchased the DEPB licenses through the petitioners representatives, and that payment had been made through debit notes were alone filed; these self-serving statements did not establish that the sale did not occasion inter-state movement of the goods; it was reasonable to come to the conclusion that the buyers were found first, and then the licenses were sent either by person or through courier or post to three different cities in three different States of India, to be handed over to the agreed upon buyers; when the DEPBs were carried by their person, the movement of goods took place from the State of Andhra Pradesh to the States of Uttar Pradesh, Gujarat and Tamilnadu; on being asked whether the petitioner had any branch in Uttar Pradesh, Gujarat and Tamilnadu, the petitioners counsel had replied in the negative; this also established that the goods moved as a result of concluding a sale transaction with their buyers; the Ten DEPB licenses in question were worth Rs.63,98,197.00; it was unimaginable that such valuable goods, where each licence carried an average value of more than Rs.6.00 lakhs, were simply carried by the petitioners representative to other States; and he went there in search of buyers without the petitioner having concluded the sales before his doing so. In the absence of any documentary proof the STAT rejected the contention of the petitioner, and dismissed the appeal.