M/S. TVS MOTOR COMPANY LIMITED v. STATE OF KERALA

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 30TH DAY OF JULY 2020 / 8TH SRAVANA, 1942** **ST.Rev..No.34 OF 2015** **AGAINST THE ORDER/JUDGMENT IN TA 24/2013 DATED 27-11-2014 OF S.T.A.T.ADDITIONAL BENCH,ERNAKULAM** ## **REVISION PETITIONER/APPELLANT/APPELLANT IN TA 24/13/ASSESSEE:** **M/S. TVS MOTOR COMPANY LIMITED AMBADY TOWERS, EDAPPALLY, ERNAKULAM** **BY ADV. SMT.K.LATHA** ## **RESPONDENT/RESPONDENT/RESPONDENT IN TA 24/13/REVENUE:** **THE STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAX DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001** ## **BY SENIOR GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN** **THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 30.07.2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** S.T.REV.No.34/2015 -2- ## **ORDER** ## **T.R.RAVI, J.** The assessee, a dealer in motor vehicles and accessories, has filed this sales tax revision case. The issue relates to the assessment for the year 2004-05. The final assessment for the year was completed by the Fast Track Adalath Team as per order dated 30.11.2009. The said assessment was set aside by the Tribunal on 8.11.2010. The Tribunal directed to complete the assessment afresh under Section 17D of the KGST Act, in accordance with the principles laid down by this Court in the decision in HPCL v. Assistant Commissioner, Commercial Taxes, Ernakulam, reported in [2009(4)KHC 819] regarding the procedure to be followed under Section 17D. Thereafter, the assessee produced the books of accounts and other details before the Adalath on 10.11.2011. 2. On verification of the accounts, certain defects were noted and the Assessing Authority decided to reject the return S.T.REV.No.34/2015 -3- and accounts and to complete the assessment to the best of judgment. A sum of Rs.1,10,03,640/- was added to the turnover reported by the assessee for the reason that the assessee has not proved the claim of stock transfer for that value. The contention of the assessee is that they had submitted Form F declarations for the above said amount and also provided a statement showing the details of Engine number and Chassis number of the vehicles stock transferred, with details of invoices subsequently issued from the Consignee branches which tally with the details of the vehicles which were stock transferred. The assessee contended that there is no legal requirement that the factum of movement of goods should be proved only by production of documents bearing the Checkpost seals. The assessee relied on the judgment of this Court in **Carborandum Universal Ltd. vs State of Kerala and others** reported in **[(2006) 147 STC 408]** . 3. The Assessing Authority has considered the contention of the assessee and on facts, found that the movement of goods S.T.REV.No.34/2015 -4- has not been proved. It was noticed that the details of invoices subsequently raised by the company situated in the other State to their dealers in that State cannot be treated as concrete evidence to establish that the vehicles sold by the branch were out of the disputed stock transferred vehicles. It is further found that in the invoices raised by the company, the Engine number and Chassis number are not mentioned and that these numbers were included only in the annexure which was alleged to be part of the sale invoices. It is also found that the assessee had not produced the evidence of sale of the vehicle subsequent to the alleged stock transfer, showing the Engine number, Chassis number in the invoice and the registration details of the vehicles. Annexure A1 is the assessment order. The assessee challenged Annexure A1 before the Appellate Tribunal. By Annexure A3 order, the Appellate Tribunal dismissed the appeal, finding that the assessee has not produced any documentary evidence to prove the movement of goods, apart from Form F declarations. S.T.REV.No.34/2015 -5- Aggrieved by Annexure A3 order, the assessee has filed this revision petition. 4. Heard Smt.K.Latha on behalf of the petitioner and Sri V.K.Shamsudeen, Senior Government Pleader, on behalf of the State. The counsel for the petitioner contends that the Assessing Authority and the Tribunal had not followed the dictum laid down in the decision in **Carborandum Universal Ltd. v. State of Kerala & others [(2006) 147 STC 408]** , **C.P.K.Trading Company v. Additional Sales Tax Officer [(1990) 76 STC 211(Ker)]** , **Vijayamohini Mills v. v. State of Kerala [(1989) 75 STC 63 (Ker)]** , **Ashok Leyland Ltd. v. State of Tamil Nadu & anr. [(2004) 134 STC 473]** , while concluding that the assessee has failed to prove the stock transfer and wrongly followed the decision in **Esab India Ltd. v. State of Kerala [(2004) 12 KTR 34]** . It is also contended that principles of natural justice as laid down in decision in **Kranti Associates (P) Ltd. v. Masood Ahmed Khan [(2010) 9 SCC 496]** has been violated. The Senior Government Pleader relied on the decision in S.T.REV.No.34/2015 -6- **Carborandum Universal Ltd. v. State of Kerala** reported in **[(2006) 148 STC 339 (Ker)]** to support the decision of the Tribunal. 5. We have perused Annexure A1 Assessment order and Annexure A3 order of the Tribunal. Neither of the authorities have decided the issue solely on the basis of the judgment in **Esab's case (supra)** as contended by the petitioner. The Assessing Authority has noticed the contentions of the petitioner regarding the cases referred above. The Assessing Authority has not stated anywhere in its order, that the documents with check post seal alone will be accepted as proof of movement of goods. The same is the case of the order of the Tribunal. The contention raised by the petitioner in that regard is without any factual basis and we do not propose to go into the same. So also, neither the Assessing Authority nor the Tribunal has rendered any finding against the dictum in the judgments referred to by the counsel for the petitioner. All the judgments referred to, reiterate that the burden is on the assessee to prove the movement of goods S.T.REV.No.34/2015 -7- from one State to another. It is well settled that under Section 6A of the Central Sales Tax Act, 1956, the burden of proof is on the assessee to show that there is a transfer of goods other than by way of sale. The law requires that the details of the goods stock transferred are contained in the form of a declaration as prescribed and the said declaration is to be submitted along with evidence of despatch of such goods. That is to say, the mere submission of Form F declaration is not sufficient and the dealer is expected to produce evidence showing the despatch of such goods. None of the judgments are to the effect that once Form F declarations are submitted, the burden shifts from the assessee to the department. To hold so will be against the statute. While without Form F declaration, consignment sale cannot be claimed; the mere presence of such declaration will not result in the claim being allowed. There is no case for the assessee that they were not afforded any opportunity to put forth their contentions before the Assessing Authority and the Tribunal. As such, there is no violation of the principles of natural justice. In fact, the orders S.T.REV.No.34/2015 -8- will show that the contentions of the assessee and the documents produced by them were considered. Thus, no question of law arises for consideration by this Court. All that remains is whether the materials placed before the authorities would be sufficient to prove movement of goods. 6. Along with the revision petition, the assessee has produced Annexure A4 which is stated to have been issued by Superintendent of Central Excise Hosur-II C Range, to prove that the excise duty paid was reversed by Central Excise Department regarding 35 vehicles which are returned from the consignee branches of the petitioner in Kerala to its factory at Hosur. The said document does not prove the movement of goods from Kerala to Bangalore and will not support the contention of the petitioner regarding stock transfer from Kerala to Bangalore. Moreover, as held by a Division Bench of this Court in **Carborundum Universal Ltd. v. State [(2006) 148 STC 339 (Ker)]** , a document which may be required under the Central Excise Act and Rules is not binding on the Sales Tax Authorities S.T.REV.No.34/2015 -9- and is not a reliable piece of evidence to show transfer of stock from one State to another. The petitioner has also produced Annexure A5 statement which according to them shows the details of stock transfer of 271 motor cycles to outside State and details of Sale invoices issued by consignee branches, showing the Engine number and frame number of the vehicles sold, which according to the assessee tallies with the engine number and frame number of the motor cycles stock transferred by the assessee from Kochi. The assessee also claims that the said stock transfer is of vehicles of the value Rs.98,42,094/-. 7. A revision petition against the order of the Tribunal can be preferred to the High Court under Section 41 of the KGST Act only where the Tribunal has decided erroneously or failed to decide a question of law. This Court in its revisional jurisdiction is not expected to appreciate pure questions of fact. However, we have perused the documents produced by the assessee along with the revision to convince ourselves as to whether the authorities below have failed to consider the materials placed S.T.REV.No.34/2015 -10- before them before concluding that stock transfer has not been proved. Pages 1 to 6 of Annexure A5 shows a statement showing details of several motor cycles which are claimed to have been stock transferred on 18.6.04, 26.10.04, 27.10.04, 29.10.04, 30.10.04. Page 7 to 9 of Annexure A5 purports to relate to stock transfer of 40 motor cycles on 30.10.04. Pages 10 and 11 of Annexure A5 purports to relate to stock transfer of a similar number of vehicles on 29.10.04. Pages 12 and 13 also are to the same effect. Pages 14 and 15 of Annexure A5 purports to be an invoice dated 30.10.04, drawn in the name of M/s Vali Automobiles at Wadi and shows the sale of 9 vehicles with details of their Engine number and frame number. The total value of the invoice is Rs.3,64,854.21. Neither Annexure A4 nor A5 would help us in any manner to conclude the stock transfer of vehicles of the value of Rs.1,44,25,807/-. The Assessing Authority has found that out of the claim for stock transfer of a value of Rs.1,44,25,807/-, the assessee has produced supporting documents to prove transfer on vehicles of a value of S.T.REV.No.34/2015 -11- Rs.33,65,166/- alone. The Assessing Authority and the Tribunal cannot hence be faulted in holding that there is no material to conclude that the stock transfer regarding goods of value of Rs.1,10,03,640/- has been proved. We find no reason to interfere with the orders of the Assessing Authority and the Tribunal. The revision petition is dismissed. The parties shall bear their respective costs. Sd/- ## **K. VINOD CHANDRAN** **JUDGE** Sd/- **T.R. RAVI JUDGE** **T.R. RAVI** dsn S.T.REV.No.34/2015 12 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **ANNEXURE A THE TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE FAST TRACK TEAM, SPECIAL CIRCLE-I, COMMERCIAL TAXES, ERNAKULAM TO THE APPELLANT FOR THE YEAR 2004-2005 DATED 20-09-2012** - **ANNEXURE A2 THE TRUE COPY OF THE GROUNDS OF APPEAL MEMORANDUM AND ARGUMENT NOTES FILED BY THE PETITIONER AGAINST THE ANNEXURE A1 ORDER BEFORE THE SALES TAX APPELLATE TRIBUNAL, ADDL. BENCH, ERNAKULAM** - **ANNEXURE A3 THE TRUE COPY OF APPELLATE ORDER IN T.A.NO. 24/2013 DATED 27TH NOVEMBER 2014 ISSUED TO THE PETITIONER BY THE SALES TAX APPELLATE TRIBUNAL, ADDL. BENCH, ERNAKULAM** - **ANNEXURE A4 THE TRUE COPY OF THE RELEVANT PAPERS ISSUED BY THE SUPERINTENDENT OF CENTRAL EXCISE, HOSUR-II C RANGE, HOSUR** - **ANNEXURE A5 THE TRUE COPY OF THE STATEMENT SHOWING THE DETAILS OF STOCK TRANSFER OF 271 MOTOR CYCLES FOR RS.98,42,094/- STOCK TRANSFERRED TO OUTSIDE THE STATE AND DETAILS OF SALE INVOICES ISSUED FROM THE CONSIGNEE BRANCHES SHOWING THE ENGINE NUMBER AND FRAME NUMBER OF THE VEHICLES SOLD WHICH TALLIES WITH THE ENGINE NUMBER AND FRAME NUMBER OF THE MOTOR CYCLES STOCK TRANSFERRED BY THE APPELLANT FROM KOCHI ALONG WITH THE SAMPLE STOCK TRANSFER NOTE AND SAMPLE VEHICLE SALE INVOICE OF PETITIONERS BANGALORE BRANCH AND COPY OF JUDGMENT REPORTED IN 2010 30 VST 649 IN CIT V. MAHINDRA & MAHINDRA**