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Judgment
B. Rajendran, J.—The State has preferred this Writ Petition aggrieved against the order passed by Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai/the second respondent herein, made in M.T.A. No. 70 of 1999, dated 16.04.2004 for quashing the same. According to the petitioner, the first respondent Chitra Timber Traders, Kottakulam, Shencottah, are dealers in timber and are assessed on the file of the Deputy Commercial Tax Officer, Shencottah Assessment Circle. They were finally assessed on a total and taxable turnover of Rs. 6,78,423/- and Rs. 1,57,044/- by order dated 17.02.1994 in CST 471228/92-93 under the Central Sales Tax Act. Based on the extract verification made by the Enforcement Wing Officials, the Deputy Commercial Tax Officer, Ambasamudram vide his proceedings CST No. 471228/92-93, dated 13.08.1997, revised the original assessment and disallowed the claim of exemption on a turnover of Rs. 96,069/- as consignment sales and brought to tax as outright inter-State sales assessable to tax at 10% and also levied a penalty of Rs. 14,410/- u/s 9(2) of the CST Act. Aggrieved by the order of assessment, the first respondent preferred an appeal in AP CST 76/97 to the Appellate Assistant Commissioner (CT), Tirunelveli and the Appellate authority by order dated 23.10.1998 dismissed the appeal. A second appeal was also filed by the first respondent against the order of the Appellate Assistant Commissioner before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai, the Second Respondent herein in MTA No. 70 of 1999 and the Tribunal by its order dated 16.04.2004 allowed the appeal in full. The order of the Tribunal is erroneous and the same is liable to be set aside on its failure to consider the question as to whether the disallowance of the claim of exemption on consignment sales is in order or not on the ground that the assessing authority has acted in treating the turnover as direct inter- State sales under the guise of consignment sales. The Tribunal had set aside the concurrent findings of the authorities as the goods were directly sent to the ultimate buyer in the same lorry and the Tribunal has erred in accepting the explanation of the assessee without any materials in so far as to the sale effected to the third parties pending transport.
The assessee''s main contention is that the agent Mahesh Traders on the despatch of goods on consignment sale, they were able to secure a prospective buyer immediately and in turn they have effected the sale of goods to the ultimate buyer and therefore, it is only a consignment sale which is eligible for exemption. For which the main reasoning was, even in the sale note contains the expenditure detail to the tune of Rs. 17,387/- which includes the consignment commission. If the sale is not effected through the agent, there cannot be any necessity or need for commission. Secondly, they would also contend that the delivery note clearly contains the name of the agent and commission is being paid and the payment is made only after deduction of commission. Further, he would only contend that there is nothing wrong in the agent to get the buyer to immediately effect the sale thereby it is treating as a consignment sale. Lastly, he would contend that because of the order was obtained they have delivered the goods through the same lorry after paying the necessary lorry freight, octroi, unloading charges and measurement charges which is vital factor which has been rightly considered by the Tribunal and not considered by the lower authorities.
Heard both sides.
The State aggrieved against the order of the Tribunal which has set aside the order of lower authorities treating the sale as consignment sale. The grievance of the department is that the goods were supplied directly from the purchaser to the other State and therefore, it can be only treated as of other State sales as the goods never reached the agents place viz., Mahesh Traders and the goods were sent through the same lorry directly to the buyer. Therefore, the exemption which was originally granted by the assessing authority way back in the year 1994, was rightly sought to be withdrawn subsequent to the inspection according to the department. In this connection, when we analyse the entire episode, it is very clear that the delivery note itself contains the name of the agent and it is also very clear that the payment which was made to the respondent is only a net amount after the total sale amount and this amount clearly mentions about the commission paid to the Mahesh Traders. If it is not the consignment sale, where is the question of payment of commission. Further, it is also very clear that the agent alone has paid the lorry freight, octroi, unloading charges and measurement charges for the goods transported to another buyer. In this connection, it is worthwhile to read the original exemption order granted by the department in the year 1994. The department has categorically accepted that the goods were sent after deducting the transport charges and commission charges and they have not received any money prior to the sale. The lorry receipts have also been produced before the department and the department has also accepted that the goods were sent by lorry and Form-20 has been sent and because of the purchasers are from outside the State, under Rule 6-A of the Central Sales Tax Act, 1956, the exemption was granted. Therefore, at the time of granting exemption, the department has verified in regard to the payment of commission charges and also the payment of freight. Therefore this point has been subsequently not considered by the first appellate authority. Hence the Tribunal has rightly considered this matter and categorically come to the conclusion that it is a clear cut sale out side the State. Hence rightly the exemption was granted.
The learned Counsel for the first respondent would rely upon a decision of the Hon''ble Supreme Court reported in Ashok Leyland Ltd. Vs. State of Tamil Nadu and Another, , for the proposition that when the order is made by a statutory authority who has the jurisdiction to do so, such order cannot be reopened on the basis that there had been a mere error of judgment. In paragraph 61 the Hon''ble Supreme Court has held as under:
In the case at hand it has to be determined whether the sale in question is an inter-State one. If through the means of a legal fiction it is determined that this is not an inter-State sale, then it amounts to a transfer of stock. This finding is made by a statutory authority who has the jurisdiction to do so and there is no provision for appeal. Therefore, the order made by such authority is conclusive in that it cannot be reopened on the basis that there had been a mere error of judgment. It also cannot be reopened under another statute, for examples, the Sales Tax Act of the State concerned, when the order had been made under the Central Act. Section 9(2) of the Act is subject to the other provisions of the Act which would include sub-section (2) of Section 6A of the Act. "Subject to" is an expression whereby limitation is expressed. The order is conclusive for all purposes. It can only be reopened on a small set of grounds such as fraud, misrepresentation, collusion, etc.
He would also rely upon a judgment of this Court reported in State of Tamil Nadu Vs. Parry Agro Industries Limited and Another, wherein this Court has followed Ashok Leyland case. The relevant paragraphs are extracted as under:
It is now settled by the Supreme Court that once form F has been accepted and an assessment has been made on the basis of form F declaration filed by the assessee, revision of assessment cannot be made unless or otherwise the assessing authority has recorded a finding that assessment has been completed by fraud, misrepresentation or collusion.
Useful reference can be had to the judgment of the Supreme Court in the case of Ashok Leyland Ltd., v. State of Tamil Nadu reported in [2004] 134 STC 473, wherein the power of the authority to revise the assessment which has been made on the basis of accepting form F has been very elaborately considered by the Supreme Court and the said decision squarely covers the issue."
Therefore, it is very clear in this case also the declaration has been made by the assessee in the proper form as found in the original order itself. Therefore, rightly the Tribunal has come to the conclusion.
In a similar case reported in [2011] 46 VST 275, Ashoka Sweets v. State of Tamil Nadu, this Court has held that when the exemption is granted after the submission of Form F and verification thereon it becomes conclusive finding and when the genuineness of Form F is not disturbed reassessment is not valid. Paragraphs 9 to 11 are extracted as under: 9. As regards the jurisdiction of the assessing authority to reopen the assessment, in matters falling for consideration u/s 6A of the Central Sales Tax Act, as rightly pointed out by the learned Counsel appearing for the petitioner, the Supreme Court had an occasion to consider the scope of section 6A of the Central Sales Tax Act with reference to section 16 proceedings in the decision reported in Ashok Leyland Ltd. Vs. State of Tamil Nadu and Another, wherein the apex Court pointed out as follows (para 37, at page 502 in 134 STC):
By reason of sub-section (2) of Section 6A, a legal fiction has been created for the purpose of the said Act to the effect that transaction has occasioned otherwise than as a result of sale.
On an analysis of the aforementioned provisions, therefore, the following propositions of law emerge:
(i) The initial burden of proof is on the dealer to show that the movement has occasioned by reason of transfer of such goods which is otherwise than by reason of sale. The assessee may file a declaration. On a declaration so filed an inquiry is to be made by the assessing authority for the purpose of passing an order on arriving at a satisfaction that movement of goods has occasioned otherwise than as a result of sale.
(ii) Whenever such an order is passed, a legal fiction is created. Legal fiction, as is well-known, must be given its full effect."
Once a declaration has been accepted and acted upon by the Revenue unless and until on further enquiry made thereto, the particulars furnished were found to be incorrect or untrue, the assessment once made based on form F, could not be reopened. The apex Court pointed out that (page 509 in 134 STC):
...if such a declaration is filed and on an inquiry made pursuant to or in furtherance of the particulars furnished are found to be correct by the assessing authority, the result thereof which is evidenced by the expression ''thereupon'' shall in view of the legal fiction created would be a transaction otherwise than as a result of an inter-State sale. Furthermore, once such a legal fiction is drawn, the same would continue to have its effect no only while making an order of assessment in terms of the State Act but also for the purpose of invoking the power of reopening of assessment contained in section 9(2) of the Central Act as well as section 16 of the State Act.
In the light of the law thus declared by the apex court that section 6 A of the Central Sales Tax Act provided for a conclusive proof except on a limited ground that even after the amendment to the said provision, unless the details are found to be writ with fraud, collusion or misrepresentation or suppression of material facts, on a mere change of opinion, the findings, by themselves, would not go for any disturbance u/s 16 of the Act. Discovery of new materials although may form a ground, it, by itself, would not be a ground for reopening of proceedings unless such discovery indicates a jurisdictional error."
Therefore, as rightly pointed out by the learned Counsel for the first respondent and relied upon the judgment of the Supreme Court and and a Division Bench judgment of this Court, we do not find any reason to interfere with the reasoned order of the Tribunal which has rightly held that the exemption originally granted was correct. Hence, the writ petition is dismissed. Consequently, connected miscellaneous petition is closed. No costs.