IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER MONDAY, THE 10TH NOVEMBER 2008 / 19TH KARTHIKA 1930 S.T.Rev.No.296 of 2006 ----------------------------------------- T.A.NO.455/2004 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH-I, ERNAKULAM - ORDER DATED 15 - 8 - 2005. [ASSESSMENT YEAR 1999-2000 (CST)] .................... REVISION PETITIONER/APPELLANT/ASSESSEE:- ------------------------------------------------------------------------- T.K. AJITH KUMAR, LAKSHMI ENTERPRISES, ERNAKULAM, REP.BY HIS POWER OF ATTORNEY HOLDER, T.K.PREMANADAN. BY ADV. SRI.N.MURALEEDHARAN NAIR SRI.V.K.SHAMUSUDHEEN. RESPONDENT/RESPONDENT/REVENUE:- -------------------------------------------------------------- STATE OF KERALA. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 10/11/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:- H.L.Dattu,C.J. & A.K.Basheer,J. --------------------------------------------- S.T.Rev.No.296 of 2006 -------------------------------------------- Dated, this the 10th November, 2008 ORDER H.L.Dattu,C.J. The assessing authority has completed the assessment for the assessment year 1999-2000 under the Central Sales Tax Act, 1956 (“CST Act” for short). The assessing authority has treated the transaction between the petitioner with dealers outside the State as inter-State sales, though the assessee had claimed, that, it is consignment sales and supported by “F” Form declarations. The orders of assessment passed by the assessing authority was the subject matter of the first appeal before the first appellate authority as well as second appeal before the Tribunal. Both the authorities have held against the assessee. Therefore, the assessee is before us in this revision petition. (2) The assessee has framed the following questions of law for our consideration and decision. They are as under: “(1) Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in law in confirming the orders of the authorities denying the claim of stock transfer made and supported with valid 'F' Forms? S.T.Rev.296 of 2006 - 2 - (2) Whether on the facts and in the circumstances of the case the Appellate Tribunal had erred in stating that there is no material to hold that the assessee himself or his principal had agency agreement with the dealers outside the State especially in the light of Annexure-F to M documents? (3) Whether on the facts and in the circumstances of the case the Appellate Tribunal has erred in law in not considering the questions that whether the mere change of name will invalidate the consignment agreements made prior to the change of name?” (3) The assessee is an agent of I.C.I. India Ltd., Madras. Prior to the change of its name as I.C.I. India Ltd., it had been registered as “Indian Explosives Limited” and thereafter as “IEL Limited”, after obtaining appropriate permission from the Central Government as required under Section 23 of the Companies Act. (4) The assessee had filed its annual returns for the assessment year 1999-2000 under the provisions of CST Act. In the returns filed, the assessee had claimed, that, the goods supplied by its principal, I.C.I. India Limited, is consigned to the agents outside the State and, therefore, is entitled for exemption under Section 6A(2) of the CST Act. The assessing authority had directed the assessee to produce the agency agreement between the principal and the assessee and the agreement between the principal and the dealers outside the State. The assessee had S.T.Rev.296 of 2006 - 3 - failed to produce those documents before the assessing authority and, therefore, the assessing authority has rejected the request of the assessee for grant of exemption and, accordingly, had treated the transaction as inter-State and has levied the tax under the CST Act. The Tribunal, while concurring with the view expressed by the assessing authority, at para 7, has stated as under: “The assessing authority proposed to levy tax on the disputed transaction by finding that the appellant had not produced any evidence to prove that the transfer was not as a result of interState sale. There was no evidence to prove that the dealers referred to in the 12 agreements are his commission agents. The assessing authority found that in order to treat the transaction as consignment transfer, either the assessee himself must enter into agency agreement with the dealers outside Kerala or his principal M/s.ICI India Ltd., must have agency agreement with dealers outside Kerala. In the absence of such an agreement the transaction was treated as interstate sales. The first appellate authority also found that in none of the 12 agreements produced there are any agreements between the appellant and any of the companies or consignment sales in the respective places. The contention of the appellant was that Indian Explosive Ltd., has changed its name to ICI India Ltd., and that the entire transactions were stock transferred for consignment sale. Overruling the above objection the first appellate authority found that even though certificate of incorporation is sufficient to prove S.T.Rev.296 of 2006 - 4 - change of name of the appellant company, the appellant failed to prove that there were any agreements between the appellant and any other companies for consignment sales, and that it is not known whether the movements of goods to outside the State occasioned as a result of such agreement. The contention of the appellant is that the various state level C&F Agents are acting as the agent of the principal and that they in turn filed F Forms to prove the transfer of goods between two agents in two States, acting only as the agent of the principal. We see no merit in the above contention. There is no material to hold that the assessee himself or his principal M/s.ICI India Ltd., had agency agreement with the dealers outside Kerala. The contention that the various state level C&F Agents are acting as the agent of the principal and the F Form filed by them will prove that the movement of goods was not in consequence of a sale do not hold merit. We, therefore, concur with the finding of the lower authorities in denying the claim of branch transfer”. (5) Sri.N.Muraleedharan Nair, learned counsel appearing for the assessee, would submit, that, the assessee has agency agreement with the principal and with the help of the said agreement, the assessee had consigned the goods, which was supplied to him by the principal, to dealers outside the State and the said transfer is by consignment sales and the same is supported by 'F' Form declarations and, therefore, the assessing authority and the Tribunal were not justified in denying the claim for exemption S.T.Rev.296 of 2006 - 5 - made by the assessee. (6) We are not in agreement with the submissions made by Sri.N.Muraleedharan Nair, learned counsel appearing for the assessee. The assessee has not produced any agency agreement with the principal. The only agreement that is produced along with the revision papers is the agreement between the principal and the dealers outside the State and it has nothing to do with the assessee/petitioner before us. In the absence of such an agency agreement, we cannot hold that the sales effected by the petitioner to dealers outside the State is consignment sales and that only means, that, the sales that were effected requires to be treated as inter-State sales between the assessee and the dealers outside the State. (7) In the above view of the matter, while concurring with the findings and conclusions reached by the Tribunal, we reject the revision petition. (8) Consequently, I.A.No.25 of 2007 is dismissed. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judge vku/-