Case: Ashok Leyland Limited Vs. Union of India &amp; Others

of Maharashtra. Those orders have become final, now the Tamil Nadu authorities are seeking to reopen the assessment and proposing to treat the said movement of vehicle from Tamil Nadu to Maharashtra as inter State sales. Suppose, tomorrow it is held by the Tamil Nadu authorities that they were indeed inter State sales and tax is levied and collected by the Tamil Nadu State, can the appellant go and legitimately ask the Maharashtra authorities to refund the tax paid by it on the sale of vehicles in Maharashtra? It may not be able to do so, as the law now stands. The Maharashtra authorities may well tell the appellant that those orders have become final and their orders cannot be reopened because authorities of another State have taken a contrary view. We are not sure whether it is possible to stipulate that while deciding the question whether the said transfer of vehicles constitutes inter State sale or not, the Tamil Nadu authorities shall give notice to, implead the Maharashtra Sales Tax authorities, hear them and decide so that their decision would be binding upon the Maharashtra authorities. The law as now in force does not appear to permit such a course more particularly in a situation whether the orders of Maharashtra Sales Tax authorities have become final, as stated above. The Maharashtra authorities may well refuse to appear before the Tamil Nadu authorities. They may not accept the jurisdiction of Tamil Nadu authorities over them or over the orders passed by them. They may also refuse to submit to the jurisdiction of the Tamil Nadu authorities. On this aspect, we must, however, notice an observation in a recent decision of this Court in Bharat Heavy Electrical Limited v. Union of India, wherein the following observation occurs at Page 239: If a dispute arises in which State is the tax lawfully leviable, the authorities under the Act have got to decide it. If, in a given case, an assessee says that the particular transaction which is sought to be taxed in State A has already been taxed in State B, nothing prevents him from impleading State B in proceedings in State A and have the matter decided in the presence of all parties. It must be remembered that while acting under the Central Sales Tax Act, the State machinery acts as the machinery of the Central Government and not as the machinery of the State Government; in law, it is as if it belongs to the Central Government. This view of ours get reinforced if one keeps the provisions in S.8(2A) of the Central Sales Tax Act view. The said observation, no doubt, projects a point of view, but it has to be understood in the particular facts of that case. In that case, orders of Sales Tax authorities of any particular State had not become final. When more than one State sought to tax the same transaction on different bases, BHEL came to this Court by way of a writ petition under Art.32 of the Constitution and certain directions were made by this Court. Moreover, the matter there was decided by the High Court and the various State governments who were impleaded as respondents did not object to the jurisdiction of the High Court to decide the dispute - dispute as to the true nature of the transaction and who should tax it. In this matter, the situation is different. The orders of several State authorities have become final and there is no way provided by the Act following which the finality of those orders can be undone and the question of the true nature of the transaction decided afresh with participation of the State authorities of both the States. There is yet another fact, viz., the state governments are objecting to the jurisdiction of Tamil Nadu Sale Tax authorities to summon them and decide the question which may require them to revise their own orders. This situation did not arise in BHEL. It is in this situation that the idea of a Central mechanism has come to fore. This does not of course, mean that this Court cannot devise an appropriate method to meet the interests of justice. It can. Appropriate directions can always be given to both the concerned States to submit to the jurisdiction of a particular designated Court or Tribunal which will decide the question regarding the true nature of the transaction after hearing all the affected parties. The fact that those orders of authorities in certain proceedings have become final may not stand in the way of this Court giving appropriate directions under Art.32 or 136 or 142, as the case may be, but that situation has not yet arisen in this case. Let the Tamil Nadu assessing authorities first decide the matters before them. Thereafter, if the orders are against the appellant, we permit the appellant to file the appeal(s) directly before the Tribunal. If the Tribunal decides in favour of the appellant, no further question would arise. But if it decides against the appellant, to wit, if it holds that the sale of vehicles to the STUs, of various States are inter State sales and if it is found that those very transactions have also been taxed as intra State sales under the State sales tax enactments of another State, that would be the stage for considering the advisability of giving appropriate directions of the nature contemplated above by this Court - that is, of course, if by that time, no central mechanism to meet such a situation comes into existence. 23. In the interest of inter State trade and commerce, the suggestion for creation of a central mechanism to decide such dispute - which are really in nature of inter State disputes - may be well worth considering; every dealer affected may not be in a position to approach this Court for appropriate directions. It is for the Government of India to consider this aspect and take necessary decision in that behalf.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. We find difficult to agree with Sri Parasaran that S.6A creates a conclusive presumption. It is true that if the particulars stated in the declaration/Form F are found to be true, the assessing authority shall pass an order, either at the time of making of the assessment or at any time before, that the contents of Form F are accepted as true. On such order being made, it shall be deemed that the movement of goods to which the form relates has been occasioned otherwise than as a result of sale. But there are no words in S.6A which can be said to create a conclusive presumption or clothe the "deemed" fact with a conclusive character. All that it says is that if the particulars stated in Form F are true, certain fact shall be presumed - or shall be or deemed to have taken place, as the case may be. It is not possible to agree that the word "deemed" in Sub-section (2) of S.6A can be understood as creating a conclusive presumption nor is it possible to agree that the fact "deemed" is final and conclusive. S.6A merely states a rule of evidence. It says that where a dealer claims that certain goods have been moved from one State to another and that such movement has occasioned otherwise than as a result of sale, the burden of proving the same lies upon him. Besides creating the said rule of evidence, the section also sets out how the said burden can be discharged. It can be discharged by producing Form F and on the particulars stated in the said form being found true on being enquired into by the assessing officer. From this it does not follow that once an order is made accepting Form F as true, it is not subject to the power of reopening or revision contained in S.16 and 32 of the Tamil Nadu General Sales Tax Act read with S.92 of the Central Sales Tax Act. After all, S.6A is also one of the provisions in this Act. There is no reason to elevate it to a higher status than the rest of the provisions. If it were the intention of the Parliament to invest the "deemed" fact with the status of a conclusive presumption, the Parliament would have said so. The Court cannot supply that requirement. Ordinarily speaking, an order accepting or rejecting - Form F as true will be passed only during the assessment proceedings. There may be cases where such an order is passed earlier to the making of the assessment. Even so, such an order is incidental to and integrally connected with the assessment of the dealer. The High Court has characterised the said provision as a step in aid of assessment. Be that as it may, if the very assessment is subject to the power of reopening or revision, it is ununderstandable as to how an order under S.6A(2) is not similarly amenable. The power to reopen can be exercised under S.16 of the Tamil Nadu General Sales Tax Act "where for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax". The power is very wide, though it may be that it should not be mechanically or lightly exercised.We are, therefore, of the opinion that S.6A does not create a conclusive presumption and that an order accepting Form F, whether passed during the assessment or at any point earlier thereto, is ultimately a part and parcel of the order of assessment. Its amenability to power of reopening and revision depends upon the provisions of the concerned Slate sales tax enactment by virtue of S.9(2). It is also not possible to agree that an order under S.6A(2) has an independent existence. It does not have. An order refusing to accept Form F may or may not be appealable independently depending upon the provisions of the local sales tax enactment but it is certainly capable of being questioned in the appeal preferred against the order of assessment - for the simple reason that an order accepting or rejecting Form F does affect the quantum of turnover taxable under the Act. So far as the power of reopening is concerned, it is enough for us to say that if the order(s) accepting Form(s) F is sought to be reopened, it can be done as part of reopening of assessment or, may be, independently - that depends upon the language of the relevant provision in the local sales tax enactment. In the present case, the provision relevant is S.16 of the Tamil Nadu General Sales Tax Act. From the language of S.16, it appears that it may be possible to reopen an order accepting Form F as true without, at the same time, reopening the assessment. Even so, it must be noticed that such a reopening necessarily leads to revision/modification of the assessment order. It is equally obvious that if the reopening is confined to the order accepting Form F as true, the inquiry shall be confined to the matters relevant thereto. Whether that power has been exercised validly in these cases does not fall for our consideration. Hence, no opinion need be expressed on that aspect. The fact that the assessments are sought to be reopened only in respect of the turnover relating to sale of vehicles to State Transport Undertakings in various State but not with respect to turnover relating to sales to persons other than STUs cannot be a ground to invalidate the proceedings taken.Having thus disposed of the main contentions of the appellant, we must yet say that the situation the appellant is facing is no doubt real, which may indeed put it in good amount of jeopardy. If the vehicles which have been sold to, say, Maharashtra STU have been moved to the appellants RSO in Maharashtra and that RSO has issued Form F (which Form F has been accepted by the Tamil Nadu authorities during the course of assessment of the appellant for the relevant assessment year) reopening the said assessment/orders accepting Forms F after a number of years, seeking to treat the said movement of goods as consequent upon or incidental to contract(s) of sale (and, therefore, amounting to inter State sale taxable in the State of Tamil Nadu does present the appellant with a serious problem inasmuch as it says that it has already paid tax on sale of said vehicles in Maharashtra under the Bombay Sales Tax Act.In the interest of inter State trade and commerce, the suggestion for creation of a central mechanism to decide such dispute - which are really in nature of inter State disputes - may be well worth considering; every dealer affected may not be in a position to approach this Court for appropriate directions. It is for the Government of India to consider this aspect and take necessary decision in that behalf.