M/S Kumar And Co vs Commissioner of Trade Tax

Ashwani Kumar Mishra, J.—This revision questions an order passed by Tribunal disallowing benefit to the assessee in respect of alleged transfer of stock during transit. The assessee claimed benefit of proviso to Section 6 of the Central Sales Tax Act, 1956 to contend that goods of Rs. 4,55,024/- had been transferred to third parties, while the stock itself remained in transit, and had not been received by the assessee. The Tribunal has noticed the facts, as have been placed before it, and following two reasons appear to have prevailed for disallowing claim:

(i) There was a gap of about 3 and 1/2 months in the alleged transfer of goods to the third parties and the movement of stock itself.

(ii) That the assessee had endorsed the receiving of goods in its stock register and as such it could not be treated to be stock in transit.

Learned counsel for the revisionist has urged that any delay in sale of goods during transit, would not be material and for such purpose, has relied upon a judgement of this Court in Vijay Engineering Corp., Bijnor v. Commissioner of Sales Tax, U.P., Lucknow, 2005 NTN (27) 394. It is also submitted that goods in transit had not been received by the assessee, and prior to its receiving, the goods were transferred to the third parties who received the goods directly from the transporter.

Learned Standing Counsel, on the other hand, submits that the finding contained in the order of the Tribunal that the assessee had endorsed the entry of receiving of goods, in his books of accounts, has not been questioned, and if that be so, then the assessee''s plea that he had not received the goods from the transporter, cannot be sustained.

I have heard Sri Suyash Agarwal, learned counsel for the revisionist and learned Standing Counsel for the State, and have perused the materials brought on record.

Although the submission advanced that mere delay in transfer of goods in transit, would not be fatal, appears to have substance, but the same would not be determinative in the facts of the present case. There is a categorical finding in the order of the Tribunal that receiving of the alleged goods were endorsed in the stock register of the assessee, which would clearly mean that the goods were received by the assessee, and it could not be treated as goods in transit.

Although, learned counsel for the assessee has disputed this finding, but there is no material to substantiate such challenge. The finding of the Tribunal in that regard is a finding based on perusal of material brought on record, which has not shown to be perverse or erroneous. Once the Tribunal has come to the conclusion that receiving of the alleged goods in transit were endorsed in stock register of revisionist, the transit of goods would be treated to have concluded in law, and any transfer made thereafter, cannot be protected by applying the principles of transfer of goods during transit. The order of the Tribunal, in such circumstances, cannot be termed to be illegal or arbitrary.

Revision, accordingly, fails and is consigned to records.