1. Heard Sri B.K. Pandey, learned counsel for the revisionist.
2. These revisions were admitted on 10th July, 2014 on the following questions of law:
"Whether under the facts and circumstances of the case, the Trade Tax Tribunal was legally justified in accepting the claim of the dealer of purchase made on behalf of Ex. U.P. exporter whereas the said claim cannot be established by the dealer on record.
3. In view of the provisions of Section 58(2) of the U.P. VAT Act, 2008, this Court also admits the revision on the following question of law:
"Whether under the facts and circumstances of the case transaction in question is a deemed sale under Section 6 A of the Central Sales Tax Act 1956 liable to tax @ 4 %
4. These revisions have been filed under Section 58 of the U.P. VAT Act, 2008 (hereinafter referred to as the "Act") against the impugned order dated 17th February, 2014 passed by the Member Commercial Tax Tribunal, Ghaziabad Bench II, in Second Appeal No. 810 of 2012 and 811 of 2012 relating to assessment year 2006-07 (U.P. and Central). As a proof of service of notice on respondents by registered post, the revisionist has filed postal receipts dated 27th June, 2014 alongwith affidavit of service. Notices were also issued by this Court on 10th July, 2014. The applicant took steps. As per office report, notices were sent on 17th July 2014 to the respondents by speed post fixing 8.8.2014, but neither acknowledgement nor undelivered cover have been received back. Under the circumstances, this Court vide order dated 19th August, 2014 found that the service of notices on the respondents to be deemed sufficient.
5. Briefly stated facts of the present case are that the original assessment order for the assessment year 2006-07 (U.P. and Central) were passed by the Deputy Commissioner Commercial Tax Sector 2 Bulandshahar on 22nd September, 2009. Before passing the assessment order, the assessing officer issued a show cause notice to the respondent directing him to show cause on certain points including on the point of the sale of paddy of Rs. 1,13,96,744.80/- to M/s Amar Singh Chawal Wala (Panjab) against Form H. The respondent submitted a reply stating that purchases from farmers were made for the aforesaid Ex-U.P. Principal for sale in the course of export against Form H and thus there is no liability of tax. The assessing authority did not assess to tax the aforesaid transaction of paddy by giving benefit of Form-H.
6. Subsequently, proceeding under Section 10-B of the Act was initiated by the competent authority on the grounds, firstly that the respondent assessee has undisputedly sent paddy to M/s Amarsingh Chawal Wala (Panjab), who manufactured rice from the paddy and then exported rice, which is not a sale of paddy in the course of export under Section 5(3) of the Central Sales Tax, 1956 (hereinafter referred to the "Central Act") and secondly that according to the assessee, the purchases of paddy in question were made for Ex U.P. Principal. However, no Form F under Section 6A of the Central Act was filed.
7. Under the circumstances, the Joint Commissioner (Karyapalak) Commercial Tax Zone Bulandshahar passed two separate orders on 15th June, 2012 determining the liability to tax on first purchase of paddy under the provisions of the U.P. Act and also levied Central Sales Tax on the deemed sale of paddy in the absence of Form F and levied tax @ 8 %.
8. Aggrieved with the order under Section 10 B, respondent assessee preferred second appeal no. 810 of 2012 and 811 of 2012 for the assessment year 2006-07 (U.P. and Central) before Member Commercial Tax Ghaziabad Bench II, Ghaziabad, who allowed both the appeals by the impugned order dated 17th February, 2014 on the ground that Form F is not mandatory for the transaction falling under Section 6 A of the Central Act and since rice was exported and Form H was filed by the assessee and, as such, he is not liable to tax on paddy. With respect to assessment under the U.P. Act the Tribunal held that purchases of paddy is not the first purchase of the assessee, but it is a purchase on behalf of U.P. Ex Principal and, as such, no tax under the U.P. Act can be levied. Aggrieved with the said order of the Tribunals dated 17th February, 2014, the revisionists has filed these two revisions.
9. Sri B.K. Pandey, learned Standing Counsel submits that the Tribunal has committed manifest error of law and facts, inasmuch as, various columns of Form H including the column specified for filling up purchase orders were left unfilled. It was not proved that the purchase of paddy was preceded by any export order. As per own case of the assessee, it was a purchase on behalf of Ex U.P. Principal. Assuming that movement of goods took place from the State of U.P. to Punjab, the transaction was clearly covered by Section 6-A of the Central Act, and in absence of Form F, the transactions of paddy were deemed sale liable to Central Sales Tax. In support of his submission, he relied upon the judgment of Hon'ble Supreme Court in the case of Ashok Leyland Vs. State of Tamil Nadu and another 2004 UPTC 475.
10. I have carefully considered the submissions of the learned counsel for the revisionist and perused the record.
11. It is undisputed that the assessee has dispatched paddy of value of Rs. 1,13,96,744/- to one M/s Amar Singh Chawal Wala (Punjab). It is also not in dispute that the aforesaid dealer of Punjab has not exported the paddy. According to the own allegation of the assessee, paddy was purchased for and on behalf of M/s Amar Singh Chawal Wala (Punjab) who manufactured rice and exported it. The Tribunal recorded a finding of fact in para 9 of the impugned order that purchases from farmers were made by the assessee not in his own account but on behalf of Ex-UP-Principal. Therefore the transactions in question were nor referable to Section 6-A and not to section 5(3) of the Central Act.
12. Section 6-A of the Central Act mandatorily requires submission of Form F, which has been explained by Hon'ble Suprme Court in the case of Ashok Leyland (Supra) as under:
"45. The liability to tax on inter-State sale as contained in Section 6 is expressly made subject to the other provisions contained in the Act. Sub- Section (2) of Section 9, on the other hand, which is a procedural provision starts with the words "subject to the other provisions of this Act and the rules made thereunder". Section 6A provides for exception as regard the burden of proof in the event a claim is made that transfer of goods had taken place otherwise than by way of sale. Indisputably, the burden would be on the dealer to show that the movement of goods had occasioned not by reason of any transaction involving sale of goods but by reason of transfer of such goods to any other place of his business or to his agent or principal, as the case may be. For the purpose of discharge of such burden of proof, the dealer is required to furnish to the assessing authority within the prescribed time a declaration duly filled and signed by the principal officer of the other place of business or his agent or principal. Such declaration would contain the prescribed particulars in the prescribed form obtained from the prescribed authority. Along with such declaration, the dealer is required to furnish the evidence of such dispatch of goods by reason of Act 20 of 2002. In the event, if it fails to furnish such declaration, by reason of legal fiction, such movement of goods would be deemed for all purposes of the said Act to have occasioned as a result of sale. Such declaration indisputably is to be filed in Form F. The said form is to be filled in triplicate. The prescribed authority of the transferee State supplies the said form. The original of the said form is to be filed with the transferor State and the duplicate thereof is to be filed before the authorities of the transferee State whereas the counterfoil is to be preserved by the person where the agent or principal of the place of business of the company is situated.
46. When the dealer furnishes the original of Form F to its assessing authority, an enquiry is required to be held. Such enquiry is held by the assessing authority himself. He may pass an order on such declaration before the assessment or along with the assessment. Once an order in terms of Sub-Section 2 of Section 6A of Central Act is passed, the transactions involved therein would go out of the purview of the Central Act. In other words, in relation to such transactions, a finding is arrived at that they are not subjected to the provisions of the Central Sales Tax. It is not in dispute thereunder no appeal is provided there against.
50. Legal fiction, as is well-known, must be given its full effect.
51. In the rules of evidence, there exist several presumptions. These presumptions may be rebuttable or irrebuttable. Irrebuttable presumptions are referred to as conclusive presumptions as they stand as conclusive proof of certain facts and are open to challenge only on very meagre grounds. Under the Indian Evidence Act, Sections 41, 112 and 133 deal with conclusive presumptions. Even in other enactments, like the Indian Companies Act, 1956, such provisions exist.
52. In the case at hand it is necessary to determine whether Section 6A of the Central Sales Tax Act sets up a conclusive presumption.
"Presumptions may be looked upon as the bats of law, flitting in the twilight, but disappearing in the sunshine of facts."
53. This metaphor used by Cochran, J. in Stumpf v. Mantgomery (1924) 101 OKL 256. pithily states the law.
54. However, the rule of conclusive proof stands on a different footing. Once it is held, as we do, that Section 6A of the Central Act provides for a conclusive proof, except on a limited ground, reopening of assessment would not be permissible.
75. Section 6A of the Act although provides for a burden of proof, the same has to be read in the context of Section 6 of the said Act. Section 6 provides for liability to pay tax on inter-State sales. Any transaction which does not fall within the definition of 'sale' would not be exigible to tax, the burden whereof would evidently be on the assessee. We have noticed hereinbefore that whereas prior to the amendment in Sub-section (1) of Section 6A the dealer had an option of filing a declaration in Form-F; after such amendment, he does not have such option, insofar as in terms of the amended provision, if the dealer fails and/or neglects to file such a declaration, the transaction would be deemed to be an inter-State sale. It is to be noticed that for the aforementioned purpose also, the Parliament advisedly used the expression 'deemed'. If the expression 'deemed' is interpreted differently, an incongruity would ensue."
13. The Tribunal held in paragraph 9 of the impugned order that assessee has not purchased paddy from farmers in his own account, but purchases were made on behalf of Ex-U.P. Principal. Thereafter, Tribunal considered the provisions of Section 6A of the Central Act and mandatory requirement of filing of Form F. It referred to the decision of Hon'ble Supreme Court in the case of Ambika Steels Vs. State of U.P., (2009) NTN (29)- 296 and held in paragraph 10 (v)/ (vi) of the impugned order as under:
10 (v) But as a simple perusal of the provisions contained in Section 6 A would make it clear that this is a general provision and it has to be read with or and subject to the other provisions of the Act. The provisions of Section 5 of the Act certainly carves out an exception to Section 6-A of the Act. I am of the view that for the transfer of the goods purchased by a dealer for and on behalf of a dealer of Ex. U.P. and which is in the course of export Form F would not be required to be filed. Suffice would be if Form-H issued by the dealer Ex. U.P. is filed. Form F is required to be filed, as provided in Section 6A, if the interstate transfer of the goods is by a dealer who own the goods in his own name or retains for any kind of job work and not as an agent of the dealer Ex. U.P. Once the dealer of Ex. U.P. has issued Form H then it would be more than sufficient to hold that the transfer of the goods involves purchase or sale only for in the course of export and then it would be quite hard to hold that for tax exemption on such transfer of the goods filing of Form F would be necessary.
(VI)Here in this case I have already returned a finding that the appellant had not purchased the paddy for this own and then sold it to the miller cum exporter, but only for and on behalf of the miller cum exporter and thus the its sending the paddy to such miller cum exporter was not a transfer of goods from the appellant. And thus it could not have been required to file Form F. And the factum of the appellant filing Form H was more than enough to decide the very nature of the transaction."
14. The judgment of Hon'ble Supreme Court in the case of Ambika Steels (Supra) has to be understood in the light of observations made as under:
"We are informed that certain State(s) within whose jurisidiction transferee is located is/are not issuing F forms. In such an inability it would be open to the Assessing Officer to complete re-assessment proceedings on its own merits after examining the transaction between the parties, keeping in mind the circumstances the assessee is not in the position to obtain the Form F for no fault of his".
15. No such circumstances existed in the case of the respondent assessee and as such the judgment in the case of Ambika Steels (Supra) has no application on the facts of the present case.
16. The interpretation of Section 6A given by the Tribunal in the impugned order is completely contrary the law laid down by Hon'ble Supreme Court in the case of Ashok Leyland (Supra)
17. On one hand the Tribunal has recorded the finding that transaction of paddy in question was purchase by the assessee on behalf of Ex U.P. Principal and on the other hand it recorded a finding that the sale of paddy to M/s Amar Singh Chawal Wala (Panjab) was a sale in the course of export. In my view, one and the same transaction cannot be said to be purchase for and on behalf of Ex-U.P. Principal and also a sale in the course of export by the assessee. In case of purchase on behalf of Ex UP Principal, there cannot be a sale in the course of export under Section 5(3) as the assessee would only be an agent i .e. an extended of the Principal. If the transactions are said to be sale in the course of export, then it cannot be a transaction of purchasing agency. Thus both the findings recorded by the Tribunal in the impugned order cannot co-exist.
18. Since Form 6 R and 9 R have been issued with respect to the transactions in question and according to initial case of the assessee, the transactions were alleged to be commission agency purchase and, as such, the movement of paddy from the State of U.P. to the State of Punjab was an interstate transaction. It certainly fall under Section 6-A of the Central Act. By legal fiction, these transactions became a Central sale liable to tax @ 4 % being a declared commodity under Section 14 of the Central Act, due to non compliance of conditions of Section 6 A. Under the circumstances and also in view of the law laid down by Hon'ble Supreme Court in the case of Ashok Leyland (Supra), the transactions in question were deemed interstate sale liable to tax under the Central Act. However, assesee cannot be held liable to tax under the U.P. Act for reason that the applicants have failed to prove first purchase of paddy by the assessee.
19. In view of above discussions, revision no. 454 of 2014 in respect of assessment year 2006-07 (Central) is partly allowed. Paddy is held liable to Central Sales Tax @ 4% being a declared commodity. Case is remanded to the Tribunal to pass order afresh in the light of the observations made above. Revision no. 456 of 2014 in respect of assessment year 2006-07 (U.P.) is dismissed. Questions of law are answered accordingly.
Order Date :- 11.9.2014 Sanjeev