M/s. Hindustan Petroleum Corporation Limited Vs. Commissioner of Sales Tax & Another
EmailAppeal: Civil Appeal No. 8353 of 2009
[Arising out of SLP (C) No. 19799 of 2008]
[From the Judgement and Order dated 16.05.2008 in WP No. 3181/2007 of the High Court of Orissa at Cuttack]
[Arising out of SLP (C) No. 19799 of 2008]
[From the Judgement and Order dated 16.05.2008 in WP No. 3181/2007 of the High Court of Orissa at Cuttack]
Petitioner: M/s. Hindustan Petroleum Corporation Limited
Respondent: Commissioner of Sales Tax & Another
Apeal: Civil Appeal No. 8353 of 2009
[Arising out of SLP (C) No. 19799 of 2008]
[From the Judgement and Order dated 16.05.2008 in WP No. 3181/2007 of the High Court of Orissa at Cuttack]
[Arising out of SLP (C) No. 19799 of 2008]
[From the Judgement and Order dated 16.05.2008 in WP No. 3181/2007 of the High Court of Orissa at Cuttack]
Judges: S.H. Kapadia & Aftab Alam, JJ.
Date of Judgment: Dec 11, 2009
Appearances:
Appearances
Mr. Gourab Banerji, ASG, Mr. Saurav Agrawal, Mr. Haseeb, Mr. R. Dubey, Mr. Amit Pawan, Advocates, with him for the Petitioner(s).
Mr. M. Chandrasekharan, Senior Advocate, Mrs. Kirti Renu Mishra, Mr. Tara Chandra Sharma, Ms. Neelam Sharma, Mr. Rupesh Kumar, Advocates, with him for the Respondent(s).
Mr. Gourab Banerji, ASG, Mr. Saurav Agrawal, Mr. Haseeb, Mr. R. Dubey, Mr. Amit Pawan, Advocates, with him for the Petitioner(s).
Mr. M. Chandrasekharan, Senior Advocate, Mrs. Kirti Renu Mishra, Mr. Tara Chandra Sharma, Ms. Neelam Sharma, Mr. Rupesh Kumar, Advocates, with him for the Respondent(s).
Head Note:
SALES TAX
Central Sales Tax Act, 1956
Section 6A – Scope and applicability – Movement of goods otherwise than on sale – Burden of proof – Discharge of burden. Held that burden is upon the dealer and said burden is discharged upon furnishing Form-F and evidence of despatch.
Central Sales Tax Act, 1956
Section 6A – Scope and applicability – Movement of goods otherwise than on sale – Burden of proof – Discharge of burden. Held that burden is upon the dealer and said burden is discharged upon furnishing Form-F and evidence of despatch.
Section 6A – Orissa Sales Tax Rules, Rules 10 and 12(8) – Movement of goods – Movement otherwise than by way of sale – Form-F furnished and accepted – Notice of re-assessment – No time given for submission – Orders passed virtually ex-parte – Justification. Held that orders are set aside and matter remitted back to Assessing Authority to consider if re-opening was maintainable and effect of Form-F.
Held:
Section 6A of Central Sales Tax Act, 1956 is in two parts. The first part mandates that the burden of proof is on the dealer to prove that the movement of the goods to any other place of his business is occasioned otherwise than by way of sale(s). The second limb of Section 6A of the CST Act stipulates that the dealer is permitted to discharge the burden of proof by furnishing declaration as prescribed in Form-F along with evidence of despatch of such goods. Under Section 6A(2) of the CST Act it is inter alia provided that if the Assessing Authority is satisfied after making such enquiry as he may deem necessary that the particulars contained in the declaration are true he may, at the time of the assessment of tax, make an order to that effect and thereupon the movement of goods to which the declaration related shall be deemed to have been occasioned otherwise than as a result of sale(s). (Para 7)
Appellant- corporation had furnished Form-F in respect of Rs. 331,63,04,081.97 which was accepted by the Assessing Authority both in the assessment order and the re-assessment order. (Para 7)
The High Court has failed to consider the Challenge to the order of re-assessment by the appellant- corporation on the ground that it was a case of change of opinion. Lastly, looking to the magnitude of the matter including the demand the Assessing Authority ought to have given more time to the appellant-corporation for producing the relevant documents. In this case the impugned order of re-assessment dated 15.2.07 is virtually an ex-parte order. (Para 8)
In the aforestated circumstances, we set aside the impugned judgment of the High Court dated 16.5.08 in Writ Petition (C) No. 3181 of 2007 as also the order of re-assessment dated 15.2.07 passed by the Assessing Authority. Accordingly, we remit this case to the Assessing Authority. (Para 9)
JUDGEMENT:
ORDER
1. Leave granted.
2. Appellant-Hindustan Petroleum Corporation is inter alia engaged in the business of refining and selling of petroleum products including High Speed Diesel (HSD) and Superior Kerosene Oil (SKO). Appellant- corporation is a registered dealer in the State of Orissa for the purpose of Central Sales Tax Act, 1956 (for short, ‘CST Act’).
3. Appellant-corporation sells HSD and SKO by dispatching the said goods from various refineries to the Haldia Port, West Bengal. Since, Big Ocean Tankers cannot be sent to the Haldia Port, West Bengal, the entire load of SKO and HSD which are carried by the Big Ocean Tankers are unloaded in the appellant-corporation’s terminal at Paradeep Port, Orissa. Out of the said stock a certain portion of the goods is used for local sales inside the state of Orissa and sales tax under Orissa Sales Tax Act, 1947 is paid. The remaining portion is moved to Haldia Port in West Bengal by way of Small Tanker Vessels on ‘stock transfer’ basis.
4. During the assessment year 2001-02 the appellant-corporation moved HSD and SKO from Paradeep Port, Orissa to Haldia Port, West Bengal in the total quantity of 31,976.331 KL of SKO and 2,10,285.507 KL of HSD respectively. The ownership and title of the goods remained with appellant-corporation as can be seen from the Bill of ladings. The appellant-corporation furnished a declaration in terms of Form-F declaring that the movement of the subject-goods stood occasioned by stock transfer and not by inter-State Sale.
5. The Assessing Authority vide its order dated 23.03.2005 held that ‘as the dealer assessee could furnish declaration form ‘F’ for the entire stock transfer effected to the tune of Rs. 331,63,04,081.97, the dealer assessee is allowed the stock transfer claimed’. However, the Assessing Authority did not accept the assessee’s explanation regarding wrongful inclusion of certain sales to M/s IBP & Co. as inter state sales. Aggrieved to this extent by the decision of the Assessing Authority, the appellant-corporation preferred statutory appeal before the first appellate authority which dismissed its appeal vide order dated 26.12.2005. Being aggrieved, the appellant- corporation preferred Second Appeal to the Tribunal.
6. While the appeal was pending, the Assessing Authority gave notice to the appellant-corporation on 29.12.06 seeking to reopen the assessment on the ground that a portion of the total turnover had escaped assessment. Vide order dated 15.02.2007, the Assessing Authority passed re-assessment order rejecting the request for adjournment made by the representative of the appellant- corporation. The Assessing Authority accepted all the F Forms submitted by the appellant to the extent of Rs. 3,31,63,04,081.97. Nevertheless, the Assessing Authority held that the entire transaction in relation to the movement of goods from appellant-corporation’s Terminal at Paradeep Port, Orissa to Haldia Port, West Bengal amounted to inter-State sale(s). Suffice it to state that against the reopening of assessment, the appellant-corporation moved the High Court in Writ Petition (C) No. 3181 of 2007 seeking to challenge the reopening of assessment by the Assessing Authority raising additional tax demand of Rs. 356,68,54,887.27/- including penalty of Rs. 214,01,12,932.36/-. By the impugned judgment dated 16.5.08 the Division Bench of the Orissa High Court dismissed the said writ petition hence this civil appeal by way of petition for special leave is filed by the appellant-corporation.
7. At the outset, we may state that Section 6A of Central Sales Tax Act, 1956 is in two parts. The first part mandates that the burden of proof is on the dealer to prove that the movement of the goods to any other place of his business is occasioned otherwise than by way of sale(s). The second limb of Section 6A of the CST Act stipulates that the dealer is permitted to discharge the burden of proof by furnishing declaration as prescribed in Form-F along with evidence of despatch of such goods. Under Section 6A(2) of the CST Act it is inter alia provided that if the Assessing Authority is satisfied after making such enquiry as he may deem necessary that the particulars contained in the declaration are true he may, at the time of the assessment of tax, make an order to that effect and thereupon the movement of goods to which the declaration related shall be deemed to have been occasioned otherwise than as a result of sale(s). In this case, as stated above, appellant- corporation had furnished Form-F in respect of Rs. 331,63,04,081.97 which was accepted by the Assessing Authority both in the assessment order and the re-assessment order. In the said writ petition what was submitted by the appellant-corporation was that the notice for re-assessment was wholly without jurisdiction and that the Assessing Authority could not have reopened the assessment in invoking Rule 10 and Rule 12(8) of the Orissa Rules in relation to transactions for which Form-F was furnished and accepted for the above figure.
8. Further, the High Court has failed to consider the challenge to the order of re-assessment by the appellant- corporation on the ground that it was a case of change of opinion. Lastly, we find merit in the contention advanced on behalf of the appellant-corporation that looking to the magnitude of the matter including the demand the Assessing Authority ought to have given more time to the appellant-corporation for producing the relevant documents. In this case the impugned order
of re-assessment dated 15.2.07 is virtually an ex-parte order.
9. In the aforestated circumstances, we set aside the impugned judgment of the High Court dated 16.5.08 in Writ Petition (C) No. 3181 of 2007 as also the order of re-assessment dated 15.2.07 passed by the Assessing Authority. Accordingly, we remit this case to the Assessing Authority with the direction to give full opportunity to the appellant- corporation and decide the re-assessment proceedings including the jurisdictional fact as to whether reopening of assessment was at all maintainable, in accordance with law. The Assessing Authority will also consider the effect of Form-F declaration submitted by the appellant-corporation and accepted by the authority for the above figure.
10. Accordingly, the civil appeal stands allowed with no order as to costs.
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1. Leave granted.
2. Appellant-Hindustan Petroleum Corporation is inter alia engaged in the business of refining and selling of petroleum products including High Speed Diesel (HSD) and Superior Kerosene Oil (SKO). Appellant- corporation is a registered dealer in the State of Orissa for the purpose of Central Sales Tax Act, 1956 (for short, ‘CST Act’).
3. Appellant-corporation sells HSD and SKO by dispatching the said goods from various refineries to the Haldia Port, West Bengal. Since, Big Ocean Tankers cannot be sent to the Haldia Port, West Bengal, the entire load of SKO and HSD which are carried by the Big Ocean Tankers are unloaded in the appellant-corporation’s terminal at Paradeep Port, Orissa. Out of the said stock a certain portion of the goods is used for local sales inside the state of Orissa and sales tax under Orissa Sales Tax Act, 1947 is paid. The remaining portion is moved to Haldia Port in West Bengal by way of Small Tanker Vessels on ‘stock transfer’ basis.
4. During the assessment year 2001-02 the appellant-corporation moved HSD and SKO from Paradeep Port, Orissa to Haldia Port, West Bengal in the total quantity of 31,976.331 KL of SKO and 2,10,285.507 KL of HSD respectively. The ownership and title of the goods remained with appellant-corporation as can be seen from the Bill of ladings. The appellant-corporation furnished a declaration in terms of Form-F declaring that the movement of the subject-goods stood occasioned by stock transfer and not by inter-State Sale.
5. The Assessing Authority vide its order dated 23.03.2005 held that ‘as the dealer assessee could furnish declaration form ‘F’ for the entire stock transfer effected to the tune of Rs. 331,63,04,081.97, the dealer assessee is allowed the stock transfer claimed’. However, the Assessing Authority did not accept the assessee’s explanation regarding wrongful inclusion of certain sales to M/s IBP & Co. as inter state sales. Aggrieved to this extent by the decision of the Assessing Authority, the appellant-corporation preferred statutory appeal before the first appellate authority which dismissed its appeal vide order dated 26.12.2005. Being aggrieved, the appellant- corporation preferred Second Appeal to the Tribunal.
6. While the appeal was pending, the Assessing Authority gave notice to the appellant-corporation on 29.12.06 seeking to reopen the assessment on the ground that a portion of the total turnover had escaped assessment. Vide order dated 15.02.2007, the Assessing Authority passed re-assessment order rejecting the request for adjournment made by the representative of the appellant- corporation. The Assessing Authority accepted all the F Forms submitted by the appellant to the extent of Rs. 3,31,63,04,081.97. Nevertheless, the Assessing Authority held that the entire transaction in relation to the movement of goods from appellant-corporation’s Terminal at Paradeep Port, Orissa to Haldia Port, West Bengal amounted to inter-State sale(s). Suffice it to state that against the reopening of assessment, the appellant-corporation moved the High Court in Writ Petition (C) No. 3181 of 2007 seeking to challenge the reopening of assessment by the Assessing Authority raising additional tax demand of Rs. 356,68,54,887.27/- including penalty of Rs. 214,01,12,932.36/-. By the impugned judgment dated 16.5.08 the Division Bench of the Orissa High Court dismissed the said writ petition hence this civil appeal by way of petition for special leave is filed by the appellant-corporation.
7. At the outset, we may state that Section 6A of Central Sales Tax Act, 1956 is in two parts. The first part mandates that the burden of proof is on the dealer to prove that the movement of the goods to any other place of his business is occasioned otherwise than by way of sale(s). The second limb of Section 6A of the CST Act stipulates that the dealer is permitted to discharge the burden of proof by furnishing declaration as prescribed in Form-F along with evidence of despatch of such goods. Under Section 6A(2) of the CST Act it is inter alia provided that if the Assessing Authority is satisfied after making such enquiry as he may deem necessary that the particulars contained in the declaration are true he may, at the time of the assessment of tax, make an order to that effect and thereupon the movement of goods to which the declaration related shall be deemed to have been occasioned otherwise than as a result of sale(s). In this case, as stated above, appellant- corporation had furnished Form-F in respect of Rs. 331,63,04,081.97 which was accepted by the Assessing Authority both in the assessment order and the re-assessment order. In the said writ petition what was submitted by the appellant-corporation was that the notice for re-assessment was wholly without jurisdiction and that the Assessing Authority could not have reopened the assessment in invoking Rule 10 and Rule 12(8) of the Orissa Rules in relation to transactions for which Form-F was furnished and accepted for the above figure.
8. Further, the High Court has failed to consider the challenge to the order of re-assessment by the appellant- corporation on the ground that it was a case of change of opinion. Lastly, we find merit in the contention advanced on behalf of the appellant-corporation that looking to the magnitude of the matter including the demand the Assessing Authority ought to have given more time to the appellant-corporation for producing the relevant documents. In this case the impugned order
of re-assessment dated 15.2.07 is virtually an ex-parte order.
9. In the aforestated circumstances, we set aside the impugned judgment of the High Court dated 16.5.08 in Writ Petition (C) No. 3181 of 2007 as also the order of re-assessment dated 15.2.07 passed by the Assessing Authority. Accordingly, we remit this case to the Assessing Authority with the direction to give full opportunity to the appellant- corporation and decide the re-assessment proceedings including the jurisdictional fact as to whether reopening of assessment was at all maintainable, in accordance with law. The Assessing Authority will also consider the effect of Form-F declaration submitted by the appellant-corporation and accepted by the authority for the above figure.
10. Accordingly, the civil appeal stands allowed with no order as to costs.
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