The present appeal preferred by the assessee-dealer under section 28 of the Gujarat Value Added Tax Act, 2003 is directed against the judgment dated 20th April, 2010 of the Gujarat Value Added Tax Tribunal in Second Appeal No. 106 of 2010. 1.1 While adjudicating the appeal, this Court formulated the following two questions of law for consideration .
[1] “Whether, on the facts and circumstances of the case, the order of the Hon'ble Gujarat Value Added Tax Tribunal is proper and legal in so far as it has confirmed the orders of the learned assessing authority as well as the learned first appeallate authority disallowing the amount of Rs. 7,44,032/= as not supported by “H” form though the same is Central Excise Duty which has been reversed ?”
[2] “Whether, in the facts of the case, the Tribunal was justified in confirming the levy of the tax on amount of Rs. 13,73,146/= on the free replacement of parts, when requirement of declaration in Form F was introduced under Section 6A(i) of the Act on 11th May 2002 ie., after the relevant Assessment Year.”
2. The necessary facts may be set out first. The appellant was a manufacturer of Hydrolic Equipments. For the period from 1.1.2002 to 21.12.2002, the Assistant Sales Tax Officer assessed the turnover of the appellate at Rs. 48,81,96,234 as per his order dated 31.12.2005. Out of the total turnover, the appellant had claimed sale of goods worth Rs. 1,44,16,234/- against ‘H’ Forms. The competent authority accepted the claim to the extent of Rs. 1,36,72,511/- only, on the ground that in respect of the transactions for balance amount Rs. 7,44,032/-, ‘H’ Forms were not produced. Accordingly, the said difference was treated as OGS sales and 10% tax was levied thereon.
2.1 The second claim of the appellant which came to be disallowed was in respect of the goods worth Rs. 13,73,146/- which was out of “the branch transfer” of goods outside the State. The appellant had submitted claim under the branch transfer for Rs. 5,30,68,480/- but since he produced ‘F’ Forms only for the amount of Rs. 5,16,95,334/-, the claim for differential amount Rs. 13,73,146/- was not accepted. According to the assessee's case, the said differential amount represented the goods transferred by way of warranty replacement. The sale tax authority did not accept the explanation of the appellant and treated it as inter-state attracting 10% Tax. Based on the above two main aspects, the Dy. Sales Tax Commissioner by order dated 31.12.2005 held that Rs. 3,04,012/- was due and payable, and directed to issue demand notice for recovery.
2.2 Against the aforesaid order, the appellant preferred appeal before the Joint Commissioner of Sales Tax. The appellate authority as per its order dated 11.09.2009 dismissed the appeal on both the above issues. It was on the same ground that the claim was not represented by ‘H’ Forms. In respect of the issue, the appellate authority concluded that it was not proved from any documentary evidence that the goods despatched were by way of replacement of goods during the warranty period. Thereafter, the assessee's second appeal before the Tribunal came to be dismissed, which is the impugned order.
3. We heard learned advocate Mr. Varun Patel for the appellant and Mr. Kabir Hathi, learned Assistant Government Pleader for the respondents.
4. Learned advocate for the appellant submitted that with regard to non submission of ‘H’ Forms for Rs. 7,44,032/-, the sales tax authorities including the Tribunal failed to appreciate that the said amount represented the worth of goods sold to one M/s Flat Products Equipments India Ltd., Mumbai. The said party had requested not to charge central excise duty in the invoices, as it was granted exemption from payment of excise duty in capacity of an exporter. Learned advocate submitted that the purchaser issued ‘H’ Form for the principal amount Rs. 46,50,200/- without the excise duty, and that the appellant issued credit note on 30.09.2002 for Rs. 7,44,032/-. It was submitted that the authorities ought to have granted the benefit on the basis of the said credit note.
4.1 Learned advocate further submitted that the Tribunal seriously erred in not believing the case of appellant that the amount of Rs. 13,73,146/- was the value of goods sent to various customers outside the State as free replacement of goods during the warranty period. The said movement of goods was not in the nature of branch transfers, nor it was by way of further sale effected outside the Sate. It was next submitted that the name of the purchaser M/s Flat Products was changed to M/s CMI-FPE Ltd., which was evident from purchaser's letter dated 10.04.2010. The said document was overlooked by the Tribunal. It was further submitted that the appellant M/s Bosch Rexroth (India) Ltd. was previously known as M/s Mannesmann Rexroth (I) Ltd. and that the erstwhile name appeared on the Challans. It was submitted that since the goods were transferred by way of free replacement, they did not represent any value and therefore not required to be accompanied by ‘F’ Form.
4.2 Learned advocate also raised another contention that the production of ‘F’ Forms was made a mandatory requirement only with effect from 11.05.2005 under section 6A of the Central Service Tax Act, 1956. It was submitted in the position prelevant prior to the amendment in section 6A was clarified in correspondence/circular dated 22.01.1974 of Ministry of Finance, Govt. of India. He invited attention of the Court to the following paragraph of the said circular and contended that in view of the law., the then prevailing, the burden could be discharged on the basis of materials other than 'F' forms as well. He submitted that in the instant case the burden was discharged by the assessee on the basis of the documents on record.
“2. Some representations have been received from the trade that certain Sales Tax authorities have insisted upon the furnishing of Form 'F' in respect of transfer effected from one State to another otherwise than by way of sale. It has also been reported that such authorities have stated exemption from Central Sales Tax would not be available unless the aforesaid declaration in Form 'F' is furnished.
3. In this connection, I am to invite your attention to the provisions of the aforesaid section 6A of the Act which uses the expression 'may' for the purpose of furnishing of Form 'F'. In other words the dealer will have the option to discharge the onus to the satisfaction of the Sales Tax authorities in any other manner. The attention of the State Government is also invited to para 2(i) of this Ministry's letter No. 8/22/60 ST (Vol.III) dated 28th September, 1967 (Extracts enclosed) wherein the legal position in respect of mandatory provision for furnishing of a certificate in respect of branch/consignment transfers was explained.”
4.3 On the other hand learned Assistant Government Pleader submitted that as far as disallowance of Rs. 7,44,032/- by the Respondent authorities is concerned the same was not supported by ‘H’ Forms. In order to seek exemption or concession in the sales tax, submission of ‘H’ Form was mandatory, and when the necessary forms were not submitted, no allowance could have been granted. On the other aspect of levy of tax on the amount of free replacement of the goods, it was submitted by learned Assistant Govt. Pleader that the burden to prove that the goods of worth mentioned were sent as replacement goods in satisfaction of warranty claim by the customers, was not discharged by the appellant.
5. Regarding the sell not supported by ‘H’ Forms, the Tribunal observed and held as under:
“As per letter written by Flat Products Equipment (I) Ltd. (paper book page no. 23) dt. 22.11.2007 Form-H bearing No. X 380098 for sum of Rs. 46,50,200/- is issued. Thereafter, the appellant has produced the letter dt. 10.04.2010 written by CMI FPE Limited (in paper book page no. 84). It is mentioned in the letter that Form-H bearing no. X 38 0098 is issued on 14.06.2002. Therefore, both the letters containing different company and different date. Credit Note for sum of Rs. 7,44,032/- is issued by Mannesmann Rexroth (I) Ltd. (Paper book page no. 30). It is totally different company. There is no explanation in statement of fact on this point. Therefore, the learned assessing officer as well as the learned first appellate officer was perfectly justified in holding that sale for sum of Rs. 7,44,032/- are without Form-H. Therefore, the tax is charged as per provision of law. There is no mistake. It does not require for infructuous(Sic).”
5.1 In reaching the aforesaid conclusion, the Tribunal overlooked certain factual aspects. It was the explanation tendered by of the appellant that the appellant was earlier known as M/s Mannesmann Rexroth (I) Ltd. It was also stated that the purchaser M/s Flat Products Equipment subsequently changed its name to Ms. CMI FPE Ltd. To substantiate those, the assssee relied on letter dated 22.11.2007 read with letter dated 10.04.2010. Those letters were before the Tribunal and have been referred to in the order. Copies thereof are also on record of the present appeal at Annexure/D and D/1 at page 20 and 21 respectively.
5.2 The Tribunal further omitted to consider that the credit note was issued by the appellant in respect of the amount of Rs. 7,44,032 /- which was not supported by ‘H’ Forms for the reason that in order to free from liability to pay the excise duty, that part of sale was without ‘H’ Forms., but the same was supposed by the Credit Note. The Tribunal did not apply its mind to all these relevant factual aspects.
6. As far as the second question is concerned, the Tribunal recorded the following findings :
“In the present case, the appellant has failed to prove the evidence about the warranty agreement, terms and conditions, correspondence between parte about replacement of parts as well as received of damage parts and detail about the damage parts.
16. Considering all facts and circumstances, the learned first assessing officer as well as learned first appellate officer were perfectly right in holding that the appellant has failed to prove the credit note for sum of Rs. 7,44,032/- as well as replacement of parts of sum of Rs. 13,73,146/-. Therefore, the learned assessing officer and the learned first appellate officer were perfectly justified in charging of tax and consequently interest on the amount of tax as per section 47(4A)(b).”
6.1 Chapter-III of the Act deals that inter state sales Tax.
Section 6 is regarding liability to pay tax on inter state sales. Section 6A deals with burden of proof in case of transfer of goods claimed otherwise than by way of sale, Sub-section (1) thereof inter-alia provides that where any dealer claims that he is not liable to pay tax on the ground that movement of goods from one state to another was occasioned by reason of transfer of such goods to any other place of his residence or to his agent or principal, and it was not by reason of sale, the burden of proving that the movement of goods was so occasioned shall be on the dealer. It is further provided that for that purpose the dealer may furnish within the prescribed time to the Assessing Authority a declaration from the principal officer of other place or his agent or principal alongwith the evidence of dispatch of such goods. By virtue of section 151 of the Finance Act, 2002, the following words came to be incorporated at the end of in Section 6A w.e.f. 11.5.2002 : “and if the dealer fails to furnish such declaration, then, the movement of such goods shall be deemed for all purposes of this Act to have been occasioned as a result of sale.”
6.2 Therefore, the requirement of declaration is in ‘F’ Form contemplated as per the above amendment in section 6A was not there prior to 11.5.2002. The period in question in this case being 1.1.2001 to 31.12.2001, it was submitted that the requirement of presentation of ‘F’ Form was not necessary in law to show that the movement of goods was otherwise than by way of sale, and that question could be proved by other evidence even in absence of ‘F’ Form. It was appellant's case that the invoices representing the movement of goods clearly indicated that they were being sent as replacement during the warranty period to various customers and no amount was charged for the said goods. It was the assessee's case that the value mentioned in the replacement invoices was for the purpose of excise duty.
7. In the light of the above facts on record, it clearly appears that the Tribunal ought to have considered the aforesaid factual and legal aspects. From the observations and findings of the Tribunal on both the issues, it could hardly be gathered that the aforesaid aspects were attended to or taken care of by the Tribunal.
8. Therefore, it is deemed appropriate to remit the matter back to the Tribunal on both the aspects. Accordingly, the matter is remanded to the Gujarat Value Added Tax Ahmedabad directing the Tribunal to decide afresh both the issues mentioned above in accordance with law after giving notice and hearing to both the sides. The Tribunal shall render a fresh decision in accordance with law within thre months from the date of receipt of certified copy of this order. It is clarified that this Court has neither gone into merits of the case, nor has expressed any opinion on the merits.
9. The questions formulated are answered as above .
10. The appeal is allowed in the above terms.
[V.M.SAHAI, J.] [N.V.ANJARIA, J.] cmjoshi