STATE OF KERALA Vs. STEEL INDUSTRIAL KERALA LTD
LAWS(KER)-2003-6-84
HIGH COURT OF KERALA
Decided on June 10,2003

STATE OF KERALA Appellant
VERSUS
Steel Industrial Kerala Ltd Respondents

JUDGEMENT

- (1.) The State is the revision petitioner. The assessee is the respondent. The matter arises under the Central Sales Tax Act, 1956 (for short "the Act"). The assessment years concerned are 1985-86 to 1991-92. The respondent-assessee is a Government owned company. It is engaged in the business of ship breaking at Bepore in Kerala. The materials gathered from the ship breaking are sold by the assessee, according to them, both by inter-State sales and by stock transfer/consignment sales. There is no dispute with regard to the inter-State transactions claimed by the assessee. The only dispute is with regard to certain turnover of stock transfer/consignment sales effected by the assessee to its branch at Coimbatore. The assessing authority did not accept the case of the assessee regarding the stock transfer/consignment sales claimed on the ground that the said transaction is also inter-State sales effected as per agreements entered into between the assessee and various parties in the State of Tamil Nadu. According to the assessing authority the movement of goods from Bepore to Coimbatore was as an incident of the contract which is covered by Section 3(a) of the Act. The assessing authority also took the view that the fact that the goods were transported under cover of delivery note of the assessee, that the assessee had obtained F form declarations and that the goods covered by the stock transfer are sold at Coimbatore and the same was assessed to tax under the Tamil Nadu General Sales Tax Act, 1959 are of no consequence. The first appellate authority has also confirmed the assessment in the appeal filed by the assessee. However, the Tribunal taking note of the fact that the assessee is a Government company, that its case is one of stock transfer/consignment sales, that the goods were transported under cover of delivery note of the assessee, that the assessee had produced F form declarations and that the transaction is covered by the provisions of Section 6A of the Act and further the goods covered by the stock transfer are sold locally at Coimbatore and the same was assessed to tax under the Tamil Nadu General Sales Tax Act would establish the case of the assessee. Though the Tribunal has adverted to the case of the department in paragraph 6 of the appellate order, we do not find any consideration of the said contention properly in the appellate order. We also find that the decision in Pearl Food Products v. State of Kerala,1994 94 STC 1 (Ker) relied on by the assessee was distinguished without properly ascertaining the factual circumstances.
(2.) We have heard the learned Government Pleader appearing for the petitioner and Sri. T.V. George, learned Counsel appearing for the respondent-assessee.
(3.) On a perusal of the orders of the three authorities we find that the Tribunal has not considered the case of the department projected in the assessment order and the first appellate authority's order and summarized in paragraph 6 of the order of the Tribunal. According to us a proper consideration of all those matters are also required for a satisfactory adjudication of the question as to whether the case put forward by the assessee that the transactions represents stock transfer/consignment sales is correct or not. We also find that both the assessing authority and the first appellate authority had simply relied on a tender notification No. 33/86-87/AT dated May 23, 1986. It would appear that the said two authorities had solely relied on the terms and conditions of the said tender without factually ascertaining as to whether the transaction covered by stock transfer was made pursuant to the said tender.;


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