The Kerala High Court has held that showing sales occurred in transits is necessary to justify claim for sales tax exemption. It was evident that the petitioner cannot establish the fact since the E1 forms relied on by him have admittedly been accounted for only in a subsequent year, which could only be after the transportation of the goods and not while the goods were in transit.
M/s I.T.I.LTD, the petitioner assessee has filed the sales tax revision petition against the order of the tribunal. The question was that whether the Appellate Tribunal is justified in sustaining the denial of concessional rate of tax for the turnover of Rs.2,95,15,307/- received as per the supplementary bills, for concluded sale and supported by a valid ‘C’ Forms.
It was alleged that the Appellate Tribunal did not consider the claim for in transit with regard to Rs. 5,83,33,441, which is supported by Form E1. Sellers can issue E1 (first sale) and E2 (subsequent sales) when doing interstate sales to produce before assessing authorities within the prescribed time.
It was found that as per the statutory provisions, the sales in transit had to be evidenced by statutory forms in Form-E1 under the Central Sales Tax (Registration and Turnover) Rules. The petitioner had produced E-Forms that pertained to sales effected in 2002–03, whereas the claim for exemption for transit sales was in respect of the assessment year 2001–02.
The Tribunal held that subsequent sales of goods affected in 2002–03 could not be considered transit sales of goods purchased in 2001–02, since the transportation of the goods stood complete in all respects in 2001–02 itself.
The petitioner contended that copies of the relevant E-forms that were accounted for in the subsequent years are available with the petitioner, and they can be produced before the authorities for verification.
The division bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has observed that the petitioner/assessee cannot establish the transit sales by showing the sale as having occurred in transit since the E1 Forms relied on by the assessee have been accounted for only in a subsequent year, which could only be after the transportation of the goods and not while the goods were in transit.
The court observed that “we fail to see how that would be of any assistance to the petitioner since it is trite that the claim for exemption in respect of transit sales must be justified by showing the sale as having occurred in transit.”
It was evident that the petitioner cannot establish the fact since the E1 forms relied on by him have admittedly been accounted for only in a subsequent year, which could only be after the transportation of the goods and not while the goods were in transit. In the above circumstance, the court refused to interfere with the finding of the Appellate Tribunal and dismissed the petition.
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