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Judgment
K. Govindarajan, J.—The Petitioners are the Assessees on the file of the 3rd Respondent. They have filed the above writ petitions seeking to declare Section 6-A of the Central Sales Tax Act 1956 as unconstitutional, illegal and ultra vires and consequently to declare the assessment order passed by the 3rd Respondent as illegal and unenforceable.
According to the Petitioners as per the said Section, they have to establish that there is no sale and thereby they are compelled to establish the negative, and if it is proved, they are liable to pay tax, and according to them, because of that, they have to pay tax even with respect to the transaction, which is not a sale, merely because they are not able to establish that there is no sale. Due to the same, according to the Petitioners, Section 6-A of the Act enables the authorities to levy tax on a transaction which is not a sale also.
Section 6-A of the Act reads as follows:
6-A. Burden of proof etc., in case of transfer of goods claimed otherwise than by way of sale- (1) Where any dealer claims that he is not liable to pay tax under this Act, in respect of any goods, on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to am 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 shall be on that dealer and for this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may. for sufficient cause, permit, a declaration duly filed and signed by the principal officer of the other place of business, or his 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.
(2) If the assessing authority is satisfied after making such inquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer under Sub-section (1) are true, he may, at the time of or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to that effect and thereupon the movement of goods to which the declaration relates shall be deemed for the purposes of this Act to have been occasioned otherwise than as a result of sale.
On a perusal of the said provision, I am not able to see any basis for the apprehension of the Petitioners. Though it is well-established that the negative cannot be asked to be established by the Assessee, there is no such burden of proving the negative contemplated u/s 6-A of the Act. The Assessee has to establish as per the said Section the movement of goods from one place to another so 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 sale. According to the said Section, it is stated that "the burden of proving that the movement of those goods was so occasioned, shall be on that dealer." So, the dealer has to establish that the movement of goods was occasioned by reason of transfer by him to any other place of his business or to his agent or principal as the case may be not by reason of sale, but it is only a stock transfer.
While construing the scope of Section 6-A of the Act, and the nature of enquiry under the said Section the Division Bench of Kerala High Court in C.P.K. Trading Co. v. Additional Sales Tax Officer, III Circle, Manancherry (1990) 76 STC 211, has held as follows:
Under Section 6A(1) of the Central Sales Act, 1956, the burden is on the dealer to prove that the movement of the goods was occasioned not by reason of sale, but was occasioned by reason of transfer, of such goods by him to any other place of his business or to his agent or principal outside the State. The burden so cast on the dealer may be discharged by furnishing the declaration as prescribed (F Forms) along with the evidence of despatch of such goods. Furnishing of the declaration (F Forms) is not compulsive or mandatory. It is open to the dealer to discharge the burden of proof cast on him, in any other manner, by adducing other evidence. In cases where the dealer exercises the option of furnishing the declaration (F Forms), the only further requirement is that the assessing authority should be satisfied, after making such enquiry, as he may deem necessary, that the particular contained in the declaration furnished by the dealer are true.
On the basis of the said decision of the Kerala High Court, the Division Bench of this Court in Dhandapani v. State of Tamil Nadu 96 S.T.C. 98, has held as follows-
Therefore, the assessing authority is obliged to perused the declaration in Form F and make such enquiry as he deems necessary to find out whether the particulars found in the declaration are true. In this regard we may point out that he is not guided mainly or solely in deciding the issue on the fact as to whether the requirements of Sub-rule (3A) of Rule 4 of the CST (T.N.) Rules has been complied with. As we have already pointed out, these provisions are directory and not mandatory. Further, the question as to whether there has been an actual sale of the goods or there has been a transfer of goods to the agent otherwise than by way of sale is also a matter which can be established by other evidence. But once the dealer chooses to file a declaration in Form F, the burden would be upon him to show that the particulars mentioned in Form F, are true it would be open to the assessing authority to record a finding that there is no material to show that the transfer of goods is otherwise than by way of sale. The conclusion of the authority to the effect that the dealer has failed to establish that the transfer of goods is otherwise than by way of sale and such a finding would be finding for the purposes of the Act and such transfer shall have to be deemed to be a sale of goods in the course in inter-State trade or commerce for the purposes of the CST Act. On the contrary, if the authority accepts that the particulars contained in the declaration filed in form F are true, the dealer is discharged of his burden and the authority has to make an order accepting the declaration and the effect of such an order would be that the movement of goods to which the declaration relates shall be deemed for the purposes of the CST Act to have been occasioned otherwise than as a result of sale.
From the above, it is very clear that the burden is on the dealer to prove that the movement of goods was occasioned by reason of transfer of goods to any other place of his business or agent or principal outside the State, and such a burden may be discharged by furnishing declaration as prescribed, along with the evidence of despatch of goods He can also discharge the burden of proof in any other manner, by adducing any other evidence. I am not able to see any sentence in the said Section 6-A of the Act, which compels the Assessee to establish the negative, namely, there was no sale. According to the said Section, he has to establish that the movement of goods is only a stock transfer, other than as a result of sale.
Even with respect to the argument of the learned Counsel for the Petitioners regarding Section 6-A(2) of the Act which is to the effect that the said provision creates a conclusive presumption it is not possible to agree that the word ''deemed'' in Sub-section (2) of Section 6-A can be understood as creating a conclusive presumption, and it is not correct to say that the fact "deemed" is final and conclusive. Section 6-A of the Act merely states a rule of evidence. I seek support to come to such conclusion from the decision in Ashok Leyland Ltd. v. Union of India (S.C.) Vol. 105 (1997) S.T.C. 152. When the Section itself is in clear and categorical terms, the apprehension of the Petitioners that they have to establish the negative, and, on the basis they are questioning the validity of Section 6-A of the Act, cannot be sustained. As the said Section does not speak about the establishment of the negative, and it only speaks about the burden of proof that the movement of the goods was occasioned by reason of transfer of goods to any other place of his business or to his agent or principal outside the State, it cannot be construed that the Petitioners have to establish the negative, namely, that there is no sale.
Though the learned Counsel appearing for the Petitioners argued the matter on merits, challenging the proceedings of the Respondents, at this stage, I cannot go into the said controversy. It is for the Petitioners to raise the same before the concerned authority and discharge their burden.
For the foregoing reasons, these writ petitions are dismissed accordingly, with the costs of Rs. 1,000/- each. Consequently, W.M.P. Nos. 12257 to 12259 of 1997 are closed.