Sangeetha Agencies vs Deputy Commissioner of Commercial Taxes (Audit-3)

Ram Mohan Reddy, J.—These petitions though listed for preliminary hearing with the consent of the learned counsel for the parties are finally heard and disposed of by this common order. Petitioner, a dealer registered under the Central Sales Tax Act, 1956, for short ''C.S.T. Act'' and the Karnataka Value Added Tax Act, 2003, for short ''K.V.O.A. Act'' filed a return for the tax period April 2005 to March 2006 declaring inter State trade, effecting sales against ''C Forms and claimed exemption by filing ''F Form in respect of stock transfer. The assessing Officer having noticed that sub-section (1) of Section 6A of the C.S.T. Act and Rule 12(5) of the C.S.T. Rules, 1957 required the petitioner to issue a single declaration which may cover transfer of goods to any other place of business or his agent or principal, as the case may be effected during a period of one month while Form ''F'' submitted covered transactions for more than one month, accordingly declined to allow such stock transfer and treated the same as inter-State sales liable to tax at 10%, by the order dated 25.4 2013 Annexure-A, invoking Section 9(2) of the C.S.T. Act.

Petitioner alleging that the assessing authority invoked sub-section (2) of Section 6A of the C.S.T. Act to reject ''F'' Form and therefore, u/s 18A of the C.S.T. Act appeal lies to the highest Appellate Authority of the State, filed S.T.A. 1677-88/13 before the Karnataka Appellate Tribunal, at Bangalore, whence by order dated 24.6.2013 Annexure-B-the appeal was rejected as not maintainable holding that the appeal was required to be filed u/s 62 of the K.V.A.T. Act, in the light of sub-section (2) of Section 9, as also sub-section (1) of Section 6A of the C.S.T. Act. Hence these petitions.

Facts are not in dispute. Petitioner filed a declaration claiming exemption from Central Sales Tax by invoking Section 6A of the C.S.T. Act and furnishing Form ''F'' declaration stating that movement of goods did not occasion inter State sale. The Assessing authority exercised jurisdiction under sub-section (2) of Section 9 which provides that the authorities empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, reassess, collect and enforce payment of tax, including any interest or penalty, payable by a dealer under the Act as if the tax or interest or penalty payable by such a dealer under the Act is a tax or interest or penalty payable under the general sales tax law of the State, and "for this purpose" they may exercise all/oil or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the even of the dissolution of such firm or partition of such family, recovery of tax from the third parties, appeals, reviews, revisions, references, refunds rebates, penalties, charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly.

Section 6A(1) of the C.S.T. Act provides for a dealer who claims that he is not liable to pay tax under the C.S.T. Act, in respect of any goods, on the ground that movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business, or to his agent or principal, as the case may be and not by reason of sale, the burden of proving that the movement of those goods was so occasioned for the dealer and for this purpose he may furnish to the assessing authority within the prescribed time or within such further time as the authority may, for sufficient cause permit, a declaration, duly filled and signed by the principal officer of the other place of business, or agent or principal as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority along with the evidence of despatch of such goods and if the dealer fails to furnish such declaration, then the movement. of such goods shall be deemed for all purposes of the Act ought to have been occasioned as sale. Sub-section (2) empowers the Assessing Authority to make an order if he is satisfied after making such enquiry as he may deem necessary that the particulars contained in the declaration furnished by the dealer under sub-section (1) are true and that no inter-State sale has been effected, to the effect that movement of goods of which declaration relates was subject to the provisions of sub-section (3) which deemed for the purpose of the Act to, be occasioned as otherwise than result of sale.

If the Assessing authority accepted Form-F filed by the petitioner it would have resulted in an order treating the transfer of goods as not sales, effected inter-State. If Form-F submitted by the petitioner is not accepted, since the assessing officer, on inquiry is not satisfied and Form-F is rejected and the claim for exemption is not extended, it cannot but be said that the petitioner is an aggrieved party. If he is so aggrieved, then there must be a remedy under the C.S.T. Act. While it is the case of the petitioner that remedy lies under Sub-section (1) of Section 18A of the C.S.T. Act investing a jurisdiction in the highest Appellate Authority of the State which is none other than the Karnataka Appellate Tribunal, the respondent-revenue through learned Govt. pleader submits that the appeal does not lie under sub-section 18A of the C.S.T. Act but u/s 62 of the K.V.A.T. Act to the Appellate Authority-Joint Commissioner of Commercial Taxes (Appeals).

Undoubtedly the order of the Appellate Authority bears the nomenclature Section 9(2) of the C.S.T. Act, however insofar as the petitioner''s declaration claiming exemption on the premise of transfer of goods not as inter-State sale by furnishing Form-F, the Appellate Authority exhaustively extracted the details of Form-F transactions and observed that they pertained to those which were more than one month old and were not within one month and on that premise rejected Form-F. In the circumstances, petitioner cannot but be said to be aggrieved by that portion of the order rejecting Form-F though the assessment order is one under Sub-section (2) of Section 9 of the C.S.T. Act.

Merely because the Assessing Authority did not set out in the nomenclature to the order that it is one u/s 6A(1) or (2) does not mean that the Assessing Officer did not exercise a jurisdiction vested in him, in that section. Having exercised jurisdiction, and rejected Form F for exemption, an appeal did lie before the Karnataka Appellate Tribunal, in accordance with section 18(A) of the C.S.T. Act.

This aspect of the matter when not considered by the Karnataka Appellate Tribunal as is demonstrated by the order impugned, has occasioned denial of justice to the petitioner. In the circumstances, it cannot but be said that the petitioner can maintain an appeal u/s 18(A) of the C.S.T. Act calling in question the order of the Appellate Authority rejecting Form-F filed by the petitioner for exemption u/s 6A by the order dt. 24.6.2013 Annexure-B. Learned Counsel for the petitioner placed reliance upon a decision of the Division Bench of this Court in Tropicana Beverages (Now known as Pepsico India Holdings Pvt. Ltd.) Vs. State of Karnataka and Others, whereunder the Division Bench having regard to Sub-sections (1) and (2) of Section 6A opined in almost similar terms which reads thus:

In other words, he may accept the declaration filed by the assessee claiming exemption in respect of the amounts covered under form-F. If the same is not accepted, then, the assessee is the aggrieved person. If, he wants to prefer an appeal by virtue of the newly inserted provision, he has to prefer an appeal to the higher authority in the State, i.e. in the State of Karnataka, i.e. Karnataka Appellate Tribunal. The said provision has no application to a case where the assessee claims exemption and to substantiate the said claim, he does not produce form F. The enquiry that is contemplated under Sub-section (2) of Section 6A is an enquiry regarding the correctness of the particulars contained in the declaration. When there is no Form-F, question of conducting an enquiry to find out the correctness of the particulars contained in the said document does not arise.

In the result, these petitions are allowed. The order dated 24.6.2013 rejecting S.T.A. 1677-88/13 of the Karnataka Appellate Tribunal is quashed. The appeals are restored to file and held to be maintainable. The Karnataka appellate Tribunal to hear the appeals and dispose of the same in accordance with law.