SECRETARY OF TAMIL NADU Vs. CHITRA TIMBER TRADERS

JUDGEMENT

(1.) 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/- under Section 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.

(2.) 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.

(3.) Heard both sides.