Decided on July 23,2009

Dharmapuri District Co -Operative Milk Producers Union Ltd. Appellant
State Of Tamil Nadu And Ors. Respondents


P.V.Reddi, J. (Chairman) - (1.) THE appellant is a milk producers' Co -operative Society having its place of business at Krishnagiri, Tamil Nadu. The appellant deals in milk and milk products, viz., ghee and skimmed -milk powder. During the years 1985 -86 to 1988 -89, the appellant sent ghee and other milk products to its branches at Jodhpur and Ahmedabad on stock -transfer basis and also sent the goods on consignment basis to its agents in other States. The appellant also effected direct inter -State sales for which it voluntarily paid Central sales tax in Tamil Nadu. For the year 1985 -86 there were no branch transfers but there were only consignment sales through agents in Gujarat, Rajasthan, Delhi and West Bengal.
(2.) IN the original assessment made under the Central Sales Tax Act, 1956 for the year 1985 -86, the consignment sales covered by F forms were excluded from the taxable turnover. In the year 1986 -87 also, on verification of sale patties and F forms and having found them in order, the assessing authority excluded the turnover relating to "consignment sales" from the taxable turnover. Only the direct inter -State sales were assessed to tax under the CST Act. However, in respect of these two assessment years (1985 -86 and 1986 -87), reassessment proceedings were initiated by the third respondent after the place of business of the dealer was inspected by the Enforcement Wing on February 21,1989. The basis of reassessment was that the Tamil Nadu Milk Producers' Co -operative Federation at Chennai collected the entire amount towards the price of goods beforehand and directed the appellant to despatch the specified goods to the agents or named buyers and therefore the alleged branch transfers and consignment sales were really in the nature of direct inter -State sales. The reply filed by the appellant was rejected and revised assessment orders were passed for the years 1985 -86 and 1986 -87 on September 30,1989. The appeals to the Appellate Assistant Commissioner, Coimbatore and further appeals to the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench, Coimbatore) were dismissed. However, the penalty was deleted. The Tribunal confirmed the finding that the disputed transactions were inter -State sales without entering into a discussion on the factual aspects. Even the decision of the Supreme Court having direct bearing on the present case was not referred to. . As regards the assessment years 1987 -88 and 1988 -89, at the time of original assessment itself, the claim of branch transfers and consignments to agents was rejected and the transactions were treated as inter -State sales. The F forms were not accepted. The first appeal and further appeal to the Tribunal filed by the dealer were rejected.
(3.) THE disputed turnovers relating to each year are as follows: Year 9185 -86 1986 -87 1987 -88 1988 -89 Rs. 74,70,474 84,12,845 1,09,73,408 30,49,000;

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