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National Tax News & Views
2009 NTN (Vol. 41) - 271
[ALLAHABAD HIGH COURT]
Hon’ble Sunil Ambwani & Hon’ble Virendra Singh, JJ.
Civil Misc. Petition (Tax) No. 1190 of 2008
M/s. A.C.P.L. Jewels Private Ltd
vs.
Union of India and others
CONNECTED WITH
Civil Misc. Writ Petition (Tax) Nos. 2017 of 2008, 2054 of 2008, 1991
of 2008, 1992 of 2008, 2098 of 2008, 1787 of 2008, 2162 of 2008,
2281 of 2008, 60 of 2009, 64 of 2009, 78 of 2009, 186 of 2009, 201 of
2009, 222 of 2009, 223 of 2009, 224 of 2009, 276 of 2009, 247 of
2009, 248 of 2009, 333 of 2009, 401 of 2009, 380 of 2009, 408 of
2009, 407 of 2009, 422 of 2009, 291 of 2009, 292 of 2009, 521 of
2009, 568 of 2009, 786 of 2009, 790 of 2009, 789 of 2009, 809 of
2009, 811 of 2009, 810 of 2009, 839 of 2009, 868 of 2009, 869 of
2009, 876 of 2009, 864 of 2009, 888 of 2009, 889 of 2009, 930 of
2009, 939 of 2009, 1204 of 2009, 1205 of 2009, 993 of 2009, 1078 of
2009, 986 of 2009, 1159 of 2009, 1237 of 2009, 1249 of 2009, 1257 of
2009, 2053 of 2008, 2280 of 2008, 1178 of 2009, 1179 of 2009, 1326
of 2008, 1331 of 2008, 1332 of 2008, 1384 of 2008, 1394 of 2008,
1420 of 2008, 1422 of 2008, 1267 of 2008, 1277 of 2008, 1930 of
2008, 27 of 2009, 493 of 2009, 612 of 2009, 626 of 2009, 670 of 2009,
807 of 2009, 1063 of 2009, 1079 of 2009, 1274 of 2009, 1275 of 2009,
1281 of 2009, 1284 of 2009, 1191 of 2008, 1320 of 2008, 1596 of
2008, 1651 of 2008, 1291 of 2009, 1292 of 2009, 1306 of 2009, 1307
of 2009, 1315 of 2009, 1317 of 2009, 1324 of 2009, 1349 of 2009,
1352 of 2009, 1363 of 2009, 1364 of 2009, 1365 of 2009, 1371 of
2009, 1374 of 2009, 1380 of 2009, 1415 of 2009, 1416 of 2009, 1423
of 2009, 1431 of 2009, 1454 of 2009, 1465 of 2009, 1490 of 2009,
1491 of 2009, 1493 of 2009, 1494 of 2009, 1503 of 2009, 1514 of
2009, 1515 of 2009, 1569 of 2009, 1570 of 2009, 1652 of 2009, 1653
of 2009, 1654 of 2009, 1655 of 2009, 1665 of 2009, 1666 of 2009,
1593 of 2009, 1594 of 2009, 1631 of 2009, 1638 of 2009, 1644 of
2009, 1645 of 2009, 1647 of 2009, 1669 of 2009, 1670 of 2009, 1679
of 2009, 1685 of 2009, 1474 of 2009, 1477 of 2009, 1534 of 2009,1536
of 2009, 1544 of 2009, 1545 of 2009, 1545 of 2009, 1549 of 2009,
1556 of 2009, 1557 of 2009, 1558 of 2009, 1559 of 2009, 1466 of
2009, 1471 of 2009, 1477 of 2009, 1478 of 2009, 1506 of 2009, 1584
of 2009, 1586 of 2009, 1607 of 2009, 1608 of 2009, 1611 of 2009,
1674 of 2009, 1701 of 2009, 1702 of 2009, 1712 of 2009, 1714 of
2009, 1718 of 2009, 1729 of 2009, 1730 of 2009, 1765 of 2009, 1786
of 2009, 1787 of 2009, 1788 of 2009, 1789 of 2009, 1817 of 2009,
1818 of 2009, 1828 of 2009, 1837 of 2009, 1838 of 2009, 1859 of
2009, 1863 of 2009, 1864 of 2009, 1901 of 2009, 1902 of 2009, 1903
of 2009, 1904 of 2009, 1905 of 2009, 1907 of 2009, 1935 of 2009,
1939 of 2009, 1951 of 2009, 1952 of 2009, 1983 of 2009, 2002 of
2009 NTN Supreme Court & High Courts 271
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National Tax News & Views
2009, 2003 of 2009, 2029 of 2009, 2030 of 2009, 2035 of 2009, 2037
of 2009, 2052 of 2009, 2113 of 2009, 2139 of 2009, 2196 of 2009,
2220 of 2009, 2221 of 2009 and 2223 of 2009.
Date of Decision : 01st December, 2009
For the Petitioners : Sri Bharat Ji Agarwal, Senior Advocate
assisted by Sri Rahul Agarwal; Sri Navin
Sinha, Senior counsel assisted by Nishant
Mishra; S/ Sri N.C. Gupta, Ashok Kumar,
Praveen Kumar, Rishi Raj Kapoor, Krishna
Agarwal, Saurabh Srivastava, Udai Chandani,
Ankur Tandon, Rakesh Pande, Vishwajeet,
Advocates
For the State : Sri S. P. Kesarwani,
For C.S.T. Department : Sri Shambu Chopra
Requirement of Furnishing Form F for the goods sent for job work
and for the goods return – Where the State(s) is/are issuing Form
F, the assessee will provided Form F for making assessment/reassessment;
where however Form F is not being issued by the
State(s), it will be open to the Assessing Officer to complete the
assessment/reassessment proceedings on its own merits after
examining the transaction between the parties, keeping in mind
the circumstance that the assessee is not in a position to obtain
the Form F, for no fault of his – In the Writ petitions, Assessment/
re-assessment orders relating to imposition of Central Sales Tax in
absence of Form F in case of Job work and goods return set aside
partly to the extent tax has been levied for the want of Form F –
Assessing Authorities directed for framing assessment/reassessment
to that extent after taking into account the factual
position in not filling the Form F by the assessee(s) - Assessee’s
directed to appear and produce Form F within six weeks before the
assessing authorities along with certified copy of the judgment for
completion of assessment/re-assessment orders - Central Sales Tax
Act, 1956 Sections 6, 6-A.
Cases referred :
Ambica Steels Ltd. vs. State of U.P. & Ors. 2007 NTN (Vol. 35) 1
Ashok Leyland Ltd. vs. State of T.N. & Anr. 2004 NTN (Vol. 24) 265
Ambica Steels Ltd vs. State of U.P. 2009 NTN (Vol. 39) 296
JUDGMENT
(Hon’ble Sunil Ambwani & Hon’ble Virendra Singh, JJ.)
In all these writ petitions, the petitioners have challenged the
assessment orders; re-assessment orders and notices under Section
21 (2) of the U.P. Trade Tax Act, for relevant assessment years, by the
Trade Tax Department, on the transactions of job-work and
goodsreturned treated as sales under Section 6-A of the Central Sales
272 A.C.P.L. Jewels Pvt. Ltd vs. Union of India & Ors. 2009 NTN
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Tax, and in which the assessing authority or the reassessing authority
has assessed or has proposed to assess the liability of Tax following
the judgment in Ambica Steels Limited vs. State of U.P. and others [2007
NTN (Vol. 35) 1; 2008 12 VST 216 (All)] on the ground that since ‘Form
F’ of the Central Sales Tax have not been produced, no other evidence
is required to be considered for determining the tax liability on the
sales/trade activities carried out by the petitioners.
2. In Ambica Steels [2007 NTN (Vol. 35) 1], a Division Bench of this
Court has held as follows:-
“ The provisions of Sections 6 and 6A of the Central Act came up for
consideration in the case of Ashok Leyland Ltd. vs. State of T.N. and
another, 2004 NTN (Vol. 24) 265; (2004) 3 SCC 1. Dealing with
Sections 6 and 6A of the Central Act, the Apex Court, in paragraph
43 of the report, has held as follows:-
“Section 6 of the Act provides for liability to tax on inter-State sales
in terms whereof every dealer is liable to pay tax thereunder on
sales effected by him in the course of inter-State trade or commerce
subject to the exception contained in the proviso appended thereto.
Such tax would be leviable notwithstanding the fact that no tax is
leviable either on seller or the purchaser under the State tax laws
of the appropriate State if that sale had taken place inside the
State.”
3. In paragraph 44 of the report, the Apex Court has further held
as under :-
“44. 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. Subsection (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 6-A
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.
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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.”
4. In paragraph 47 of the report, it has further held as under:-
“47. By reason of sub-section (2) of Section 6-A, 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.”
5. The Apex Court has, therefore, clearly laid down that, under
Section 6A of the Central Act, the burden would be on the dealer to
show that movement of the goods had been occasioned not by reason
of any transaction involving sale of goods but by reason of transfer of
such goods to any other place of business or to the agent or principal,
as the case may be, for which the dealer is required to furnish
prescribed declaration form in the absence of which the transfer would
be treated as sale.
6. Admittedly, what the petitioners send or receive either for job
work or as a return of goods from outside U.P., are goods within the
Central Act. They are claiming that the goods have been transferred/
received from ex U.P. which are not sale and not liable to tax under
Section 6 of the Central Act.
7. The submission that the goods sent for job work or received for
doing job work, do not amount to sale would depend upon the contract
entered into between the parties and would be the subject matter of
examination by the Assessing Authority. Even otherwise, under
Section 2(g)(ii) of the Central Act, transfer of goods used in execution
of work contract is treated to be a sale. If the petitioner claims that it
is not liable to tax on the transfer of goods from U.P. to ex U.P., then it
would have to discharge the burden placed upon it under Section 6A
by filing declaration Form F. It would be immaterial whether the person
to whom the goods are sent for or received after job work is a bailee.
As held by the Apex Court, under the statutory provision, the
requirement is that if any person claims that he is not liable to pay
tax on transfer of the goods from one State to another, he has to furnish
declaration Form F. This would be applicable in a case of goods returned
also. The statement of objects and reasons, referred to by Sri S.D.Singh,
does not advance his case any further.
8. Before parting with the case, we may, however, observe that as
the petitioners have claimed that they are not liable to furnish
declaration Form F in respect of the transaction in question and we
have come to the conclusion that they are, in fact, liable. We direct
the respective the Assessing Authorities to accept the declaration
Form F of each of the petitioners if they file it within a period of three
274 A.C.P.L. Jewels Pvt. Ltd vs. Union of India & Ors. 2009 NTN
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months from today and to grant exemption in accordance with law.
9. In view of the foregoing discussions, we do not find any merit in
these petitions and subject to the aforesaid observations, they are
accordingly dismissed. All the interimorders are discharged. However,
the parties shall bear their own costs.”
10. The judgment in Ambica Steels Ltd [2007 NTN (Vol. 35) 1] was
challenged in Supreme Court in Civil Appeal No. 4970 of 2008 [M/s.
Ambica Steels Ltd vs. State of U.P. and Others [2009 NTN (Vol. 39) 296].
The Supreme Court on 31.3.2009 passed an order as follows:-
“Shri Sorabjee, learned senior counsel appearing on behalf of the
assessee, on instructions, states that the appellant - assessee will
submit itself to the re-assessment proceedings initiated vide Show
Cause Notice (see Annexure P-2). He further states that the
assessee will file Form “F” with the Authority concerned within
ten weeks from today.
On expiry of the period of ten weeks the Assessing Officer will take
up re-assessment proceedings which will be completed within a
period of three months, thereafter.
At this stage, it may be mentioned that on the scope and
applicability of Section 6A of the Central Sales Tax Act, 1956, there
exists difference of opinion between the various Sales Tax Collectors
in the country and therefore since the Appellant is now ready to
file Form “F”, we are directing the Assessing Officer not to impose
penalty/interest, in the re-assessment proceedings as one time
waiver. Needless to add that waiver of penaltyand interest shall be
admissible only on Form “F” being furnished by the assessee within
the prescribed period.
The appellant has deposited a sum of Rs.1,00,00,000/- (one crore)
on 27th December, 2008, under protest vide letter of even date. It
is made clear that the said amount shall be refunded to the
assessee herein within a period of two weeks after the completion
of re-assessment proceedings, subject to adjustment, if any, in the
Duty assessed.
We are informed that certain State(s) within whose jurisdiction
the transferee is located is/are not issuing “F” Forms. In such an
eventuality 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 circumstance
that the assessee is not in a position to obtain the “F” Form, for no
fault of his.
Accordingly, this civil appeal is disposed of with no order as to costs.”
11. We have been informed that the Commissioner Trade Tax of
the State of Uttar Pradesh has issued a circular dated 26.6.2009, to
all the Zonal Additional Commissioners, Trade Tax, U.P., after seeking
opinion from the Law Department of the Government of Uttar Pradesh,
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to the effect that where the trader/dealer of the State of U.P., is not
issued Form F, by the transferee in the other State, or where the
trader/dealer doing job-work, is an unregistered dealer, to which Form
F is not issued, without any fault on the part of the trader/dealer in
the State of U.P., the Tax Assessment Authority shall examine the
transactions between the parties, and will complete the assessment
of tax on merits.
12. It is submitted that in view of the judgment of the Supreme
Court dated 31.3.2009 in M/s. Ambica Steels Ltd vs. State of U.P. [2009
NTN (Vol. 39) 296], and others and the Circular dated 26.6.2009, carrying
out the effect of the judgment of the Supreme Court, the petitioners
are advised not to challenge the vires of Section 6-A of the Central
Sales Tax Act, 1956 (hereinafter referred to as the ‘Act’), as amended
by Finance Act 2002.
13. It is contended that Section 6-A of the Act is applicable to stock
transfers and consignment transfer, and thus the applicability of the
amended Section 6-A of the Act, may be considered only with regard
to transactions involving job-work and goods-returned. We are
therefore confining our judgment only to the cases of job-work and
goods-returned.
14. Learned counsel for the petitioners would submit that the
judgment in Ashok Leyland Ltd vs. State of Tamil Nadu and another
[2004 NTN (Vol. 24) 265; 2004 (3) SCC 1] was in respect of stock transfer
and that the ratio of the judgment would not be applicable in the cases
of job-work and goods-returned. It is submitted that in Ambica Steels
(supra) the judgment of Ashok Leyland (Supra) was not correctly applied,
and that the deemed sale as envisaged in Section 6-A of the Act is a
rebuttable presumption, in proof of which evidence other than Form F
(where it is not issued) is admissible.
15. We are relieved of considering the submissions of the counsel
for the petitioners and referring the matter to a larger bench, as the
Hon’ble Supreme Court has considered the submissions in the Civil
Appeal No. 4970 of 2008 in Ambica Steels (2009 NTN (Vol. 39) 296) and
has held on 31.3.2009, that where the State(s) is/are issuing Form F,
the assessee will be provided Form F for making assessment; where
however Form F is not being issued by the State (s), it will be open to
the Assessing Officer to complete the reassessment proceedings on
its own merits after examining the transaction between the parties,
keeping in mind the circumstance that the assessee is not in a
position to obtain the Form F, for no fault of his.
16. It is submitted by Sri S.P. Kesarwani and Shri Shambhoo Chopra
appearing for the Department that in these writ petitions there are
cases arising out of assessment as well as reassessment orders and
also notices for assessment/reassessment, so far as the transaction
of job-work and goods-returned, and thus, the matter should be left
open to the assessing authority to complete the assessment or
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reassessment proceedings as the case may be on its own merits after
examining the transaction between the parties.
17. Sri Rahul Agarwal, counsel for the petitioners appearing in the
matter would submit that in some cases, the Tax Assessing
Authorities while completing the assessment have recorded the
findings that the transaction was job-work/good-returned, but
thereafter in reassessment proceedings, they again recorded a finding
that the transactions involved job-work and goods returned, but though
Form F were not produced in terms of Ambica Steels case, these
transactions will attract Tax.
18. We have taken into account the submissions, the judgment of
the Supreme Court dated 31.3.2009 [2009 NTN (Vol. 39) 296], arising
out of the judgment of the Division Bench of this Court in Ambica
Steels (2007 NTN (Vol. 35) 1), as well as the Circular Letter issued by
the Commissioner, Trade Tax Department dated 26.6.2009, and
consequently without going into the merits of the challenge to the
vires of Section 6-A of the Act or other submissions, we dispose of all
the writ petitions with the following directions:-
(1) In all the cases, in which transactions of job-work and goods
returned are involved, the assessment orders only to the extent
that the tax was imposed on such transactions for want of Form
F of the Central Sales Tax are set aside. The petitioners will
appear and submit before the assessing authority a certified
copy of this judgment in six weeks to complete the assessment
proceedings with regard to such transactions only, on its own
merits, after examining the transactions between the parties,
and keeping in mind that the assessee is not in a position to
obtain Form F for no fault of his; and
(2) In the cases where the assessee has been subjected to
reassessment proceedings in which the transactions of job-work
and goods-returned are involved, the reassessment orders only
to the extent that the tax was imposed on such transaction/s
for want of Form F of the Central Sales Tax are set aside. The
assessee will appear before the Reassessing Authority and
submit a certified copy of this judgment in six weeks, to complete
the reassessment proceedings in respect of such transactions
only, on its own merits after examining the transactions between
the parties, keeping in mind the findings recorded earlier on
such transactions, and also that the assessee is not in a position
to obtain Form F, for no fault of his.
There will be no order as to costs.
----------------------------------
2009 NTN Supreme Court & High Courts 277
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