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Court No.35
Civil Misc. Petition (Tax) No. 1190 of 2008
M/s. A.C.P.L. Jewels Private Ltd Vs. Union of India and others
CONNECTED WITH
Civil Misc. Writ Petition (Tax) Nos. 2017 of 2008, 2054 of 2008, 1991 of
2008, 1992 of 2008, 2098 of 2008, 1787 of 2008, 2162 of 2008, 2281 of
2008, 60 of 2009, 64 of 2009, 78 of 2009, 186 of 2009, 201 of 2009, 222
of 2009, 223 of 2009, 224 of 2009, 276 of 2009, 247 of 2009, 248 of
2009, 333 of 2009, 401 of 2009, 380 of 2009, 408 of 2009, 407 of 2009,
422 of 2009, 291 of 2009, 292 of 2009, 521 of 2009, 568 of 2009, 786 of
2009, 790 of 2009, 789 of 2009, 809 of 2009, 811 of 2009, 810 of 2009,
839 of 2009, 868 of 2009, 869 of 2009, 876 of 2009, 864 of 2009, 888 of
2009, 889 of 2009, 930 of 2009, 939 of 2009, 1204 of 2009, 1205 of
2009, 993 of 2009, 1078 of 2009, 986 of 2009, 1159 of 2009, 1237 of
2009, 1249 of 2009, 1257 of 2009, 2053 of 2008, 2280 of 2008, 1178 of
2009, 1179 of 2009, 1326 of 2008, 1331 of 2008, 1332 of 2008, 1384 of
2008, 1394 of 2008, 1420 of 2008, 1422 of 2008, 1267 of 2008, 1277 of
2008, 1930 of 2008, 27 of 2009, 493 of 2009, 612 of 2009, 626 of 2009,
670 of 2009, 807 of 2009, 1063 of 2009, 1079 of 2009, 1274 of 2009,
1275 of 2009, 1281 of 2009, 1284 of 2009, 1191 of 2008, 1320 of 2008,
1596 of 2008, 1651 of 2008, 1291 of 2009, 1292 of 2009, 1306 of 2009,
1307 of 2009, 1315 of 2009, 1317 of 2009, 1324 of 2009, 1349 of 2009,
1352 of 2009, 1363 of 2009, 1364 of 2009, 1365 of 2009, 1371 of 2009,
1374 of 2009, 1380 of 2009, 1415 of 2009, 1416 of 2009, 1423 of 2009,
1431 of 2009, 1454 of 2009, 1465 of 2009, 1490 of 2009, 1491 of 2009,
1493 of 2009, 1494 of 2009, 1503 of 2009, 1514 of 2009, 1515 of 2009,
1569 of 2009, 1570 of 2009, 1652 of 2009, 1653 of 2009, 1654 of 2009,
1655 of 2009, 1665 of 2009, 1666 of 2009, 1593 of 2009, 1594 of 2009,
1631 of 2009, 1638 of 2009, 1644 of 2009, 1645 of 2009, 1647 of 2009,
1669 of 2009, 1670 of 2009, 1679 of 2009, 1685 of 2009, 1474 of 2009,
1477 of 2009, 1534 of 2009,1536 of 2009, 1544 of 2009, 1545 of 2009,
1545 of 2009, 1549 of 2009, 1556 of 2009, 1557 of 2009, 1558 of 2009,
1559 of 2009, 1466 of 2009, 1471 of 2009, 1477 of 2009, 1478 of 2009,
1506 of 2009, 1584 of 2009, 1586 of 2009, 1607 of 2009, 1608 of 2009,
1611 of 2009, 1674 of 2009, 1701 of 2009, 1702 of 2009, 1712 of 2009,
1714 of 2009, 1718 of 2009, 1729 of 2009, 1730 of 2009, 1765 of 2009,
1786 of 2009, 1787 of 2009, 1788 of 2009, 1789 of 2009, 1817 of 2009,
1818 of 2009, 1828 of 2009, 1837 of 2009, 1838 of 2009, 1859 of 2009,
1863 of 2009, 1864 of 2009, 1901 of 2009, 1902 of 2009, 1903 of 2009,
1904 of 2009, 1905 of 2009, 1907 of 2009, 1935 of 2009, 1939 of 2009,
1951 of 2009, 1952 of 2009, 1983 of 2009, 2002 of 2009, 2003 of 2009,
2029 of 2009, 2030 of 2009, 2035 of 2009, 2037 of 2009, 2052 of 2009,
2113 of 2009, 2139 of 2009, 2196 of 2009, 2220 of 2009, 2221 of 2009
and 2223 of 2009.
=====
Advocates who appeared in the cases:

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Sri Bharat Ji Agarwal, Senior Advocate assisted by Sri Rahul Agarwal;
Sri Navin Sinha, Senior counsel assisted by Nishant Mishra; S/ Sri N.C.
Gupta, Ashok Kumar, Praveen Kumar, Rishi Raj Kapoor, Krishna
Agarwal, Saurabh Srivastava, Udai Chandani, Ankur Tandon, Rakesh
Pande, Vishwajeet for the petitioners. Sri S. P. Kesarwani for State
respondents

and Sri Shambu Chopra for Central Sales Tax

Department.
Hon'ble Sunil Ambwani, J.
Hon'ble Virendra Singh, J
In all these writ petitions, the petitioners have challenged the
assessment orders; re-assessment orders and notices under Section 21
(2) of the U.P. Trade Tax Act, for relevant assessment years, by the
Trade Tax Department, on the transactions of job-work and goodsreturned treated as sales under Section 6-A of the Central Sales Tax,
and in which the assessing authority or the reassessing authority has
assessed or has proposed to assess the liability of Tax following the
judgment in Ambica Steels Limited Vs. State of U.P. and others
[2008 12 VST 216 (All)] on the ground that since 'Form F' of the Central
Sales Tax have not been produced, no other evidence is required to be
considered for determining the tax liability on the sales/trade activities
carried out by the petitioners.
In Ambica Steels (supra), a Division Bench of this Court has held
as follows: The provisions of Sections 6 and 6A of the Central Act
came up for consideration in the case of Ashok Leyland Ltd. v.
State of T.N. and another, (2004) 3 SCC 1. Dealing with
Sections 6 and 6A of the Central Act, the Apex Court, in
paragraph 43 of the report, has held as follows:-

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"Section 6 of the Act provides for liability to tax on
inter-State sales in terms whereof every dealer is
liable to pay tax thereunder on sales effected by
him in the course of inter-State trade or commerce
subject to the exception contained in the proviso
appended thereto. Such tax would be leviable
notwithstanding the fact that no tax is leviable
either on seller or the purchaser under the State tax
laws of the appropriate State if that sale had taken
place inside the State."
In paragraph 44 of the report, the Apex Court has further
held as under :"44. The liability to tax on inter-State sale as
contained in Section 6 is expressly made subject to
the other provisions contained in the Act. Subsection (2) of Section 9, on the other hand, which is
a procedural provision starts with the words
"subject to the other provisions of this Act and the
rules made thereunder". Section 6-A provides for
exception as regard the burden of proof in the event
a claim is made that transfer of goods had taken
place otherwise than by way of sale. Indisputably,
the burden would be on the dealer to show that the
movement of goods had occasioned not by reason
of any transaction involving sale of goods but by
reason of transfer of such goods to any other place
of his business or to his agent or principal, as the
case may be. For the purpose of discharge of such
burden of proof, the dealer is required to furnish to
the assessing authority within the prescribed time a
declaration duly filled and signed by the principal
officer of the other place of business or his agent or
principal. Such declaration would contain the
prescribed particulars in the prescribed form
obtained from the prescribed authority. Along with
such declaration, the dealer is required to furnish
the evidence of such dispatch of goods by reason
of Act 20 of 2002. In the event, if it fails to furnish
such declaration, by reason of legal fiction, such
movement of goods would be deemed for all
purposes of the said Act to have occasioned as a
result of sale. Such declaration indisputably is to be
filed in Form F. The said form is to be filled in
triplicate. The prescribed authority of the transferee
State supplies the said form. The original of the
said form is to be filed with the transferor State and
the duplicate thereof is to be filed before the
authorities of the transferee State whereas the
counterfoil is to be preserved by the person where
the agent or principal of the place of business of the
company is situated."

In paragraph 47 of the report, it has further held as

under:"47. By reason of sub-section (2) of Section 6-A, a
legal fiction has been created for the purpose of the
said Act to the effect that transaction has
occasioned otherwise than as a result of sale."
The Apex Court has, therefore, clearly laid down that,
under Section 6A of the Central Act, the burden would be on the
dealer to show that movement of the goods had been
occasioned not by reason of any transaction involving sale of
goods but by reason of transfer of such goods to any other
place of business or to the agent or principal, as the case may
be, for which the dealer is required to furnish prescribed
declaration form in the absence of which the transfer would be
treated as sale.
Admittedly, what the petitioners send or receive either for
job work or as a return of goods from outside U.P., are goods
within the Central Act. They are claiming that the goods have
been transferred/received from ex U.P. which are not sale and
not liable to tax under Section 6 of the Central Act.
The submission that the goods sent for job work or
received for doing job work, do not amount to sale would
depend upon the contract entered into between the parties and
would be the subject matter of examination by the Assessing
Authority. Even otherwise, under Section 2(g)(ii) of the Central
Act, transfer of goods used in execution of work contract is
treated to be a sale. If the petitioner claims that it is not liable to
tax on the transfer of goods from U.P. to ex U.P., then it would
have to discharge the burden placed upon it under Section 6A
by filing declaration Form F. It would be immaterial whether the
person to whom the goods are sent for or received after job
work is a bailee. As held by the Apex Court, under the statutory
provision, the requirement is that if any person claims that he is

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not liable to pay tax on transfer of the goods from one State to
another, he has to furnish declaration Form F. This would be
applicable in a case of goods returned also. The statement of
objects and reasons, referred to by Sri S.D.Singh, does not
advance his case any further.
Before parting with the case, we may, however, observe
that as the petitioners have claimed that they are not liable to
furnish declaration Form F in respect of the transaction in
question and we have come to the conclusion that they are, in
fact, liable. We direct the respective the Assessing Authorities to
accept the declaration Form F of each of the petitioners if they
file it within a period of three months from today and to grant
exemption in accordance with law.
In view of the foregoing discussions, we do not find any
merit in these petitions and subject to the aforesaid
observations, they are accordingly dismissed. All the interim
orders are discharged. However, the parties shall bear their own
costs.

The judgment in Ambica Steels Ltd (Supra) was challenged in

Supreme Court in Civil Appeal No. 4970 of 2008 [M/s. Ambica Steels
Ltd Vs. State of U.P. and others]. The Supreme Court on 31.3.2009
passed an order as follows:Shri Sorabjee, learned senior counsel appearing on
behalf of the assessee, on instructions, states that the appellant
- assessee will submit itself to the re-assessment proceedings
initiated vide Show Cause Notice (see Annexure P-2). He
further states that the assessee will file Form "F" with the
Authority concerned within ten weeks from today.
On expiry of the period of ten weeks the Assessing Officer
will take up re-assessment proceedings which will be completed
within a period of three months, thereafter.
At this stage, it may be mentioned that on the scope and
applicability of Section 6A of the Central Sales Tax Act, 1956,
there exists difference of opinion between the various Sales

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Tax Collectors in the country and therefore since the Appellant
is now ready to file Form "F", we are directing the Assessing
Officer not to impose penalty/interest, in the re-assessment
proceedings as one time waiver. Needless to add that waiver of
penaltyand interest shall be admissible only on Form "F" being
furnished by the assessee within the prescribed period.
The appellant has deposited a sum of Rs.1,00,00,000/(one crore) on 27th December, 2008, under protest vide letter
of even date. It is made clear that the said amount shall be
refunded to the assessee herein within a period of two weeks
after the completion of re-assessment proceedings, subject to
adjustment, if any, in the Duty assessed.
We are informed that certain State(s) within whose
jurisdiction the transferee is located is/are not issuing "F"
Forms. In such an eventuality it would be open to the Assessing
Officer to complete re-assessment proceedings on its own
merits after examining the transaction between the parties,
keeping in mind the circumstance that the assessee is not in a
position to obtain the "F" Form, for no fault of his.
Accordingly, this civil appeal is disposed of with no order as
to costs.

We have been informed that the Commissioner Trade Tax of the

State of Uttar Pradesh has issued a circular dated 26.6.2009, to all the
Zonal Additional Commissioners, Trade Tax, U.P., after seeking opinion
from the Law Department of the Government of Uttar Pradesh, to the
effect that where the trader/dealer of the State of U.P., is not issued
Form F, by the transferee in the other State, or where the trader/dealer
doing job-work, is an unregistered dealer, to which Form F is not issued,
without any fault on the part of the trader/dealer in the State of U.P., the
Tax Assessment Authority shall examine the transactions between the
parties, and will complete the assessment of tax on merits.
It is submitted that in view of the judgment of the Supreme Court
dated 31.3.2009 in M/s. Ambica Steels Ltd Vs. State of U.P., and others
and the Circular dated 26.6.2009, carrying out the effect of the judgment
of the Supreme Court, the petitioners are advised not to challenge the

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vires of Section 6-A of the Central Sales Tax Act, 1956 (hereinafter
referred to as the 'Act'), as amended by Finance Act 2002.
It is contended that Section 6-A of the Act is applicable to stock
transfers and consignment transfer, and thus the applicability of the
amended Section 6-A of the Act, may be considered only with regard to
transactions involving job-work and goods-returned. We are therefore
confining our judgment only to the cases of job-work and goodsreturned.
Learned counsel for the petitioners would submit that the
judgment in Ashok Leyland Ltd Vs. State of Tamil Nadu and another
[2004 (3) SCC 1] was in respect of stock transfer and that the ratio of
the judgment would not be applicable in the cases of job-work and
goods-returned.

It is submitted that in Ambica Steels (supra) the

judgment of Ashok Leyland (Supra) was not correctly applied, and that
the deemed sale as envisaged in Section 6-A of the Act is a rebuttable
presumption, in proof of which evidence other than Form F (where it is
not issued) is admissible.
We are relieved of considering the submissions of the counsel for
the petitioners and referring the matter to a larger bench, as the Hon'ble
Supreme Court has considered the submissions in the Civil Appeal No.
4970 of 2008 in Ambica Steels (supra) and has held on 31.3.2009, that
where the State(s) is/are issuing Form F, the assessee will be provided
Form F for making assessment; where however Form F is not being
issued by the State (s), it will be open to the Assessing Officer to
complete the reassessment proceedings on its own merits after
examining the transaction between the parties, keeping in mind the

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circumstance that the assessee is not in a position to obtain the Form F,
for no fault of his.
It is submitted by Sri S.P. Kesarwani and Shri Shambhoo Chopra
appearing for the

Department that in these writ petitions there are

cases arising out of assessment as well as reassessment orders and

also notices for assessment/reassessment, so far as the transaction of
job-work and goods-returned, and thus, the matter should be left open
to the assessing authority to complete the assessment or reassessment
proceedings as the case may be on its own merits after examining the
transaction between the parties.
Sri Rahul Agarwal, counsel for the petitioners appearing in the
matter would submit that in some cases, the Tax Assessing Authorities
while completing the assessment have recorded the findings that the
transaction was job-work/good-returned, but thereafter in reassessment
proceedings, they again recorded a finding that the transactions
involved job-work and goods returned, but though Form F were not
produced in terms of Ambica Steels case, these transactions will attract
Tax.
We have taken into account the submissions, the judgment of the
Supreme Court dated 31.3.2009, arising out of the judgment of the
Division Bench of this Court in Ambica Steels (supra), as well as the
Circular Letter issued by the Commissioner, Trade Tax Department
dated 26.6.2009, and consequently without going into the merits of the
challenge to the vires of Section 6-A of the Act or other submissions, we
dispose of all the writ petitions with the following directions:(1)

In all the cases, in which transactions of job-work and goods-

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returned are involved, the assessment orders only to the extent that the
tax was imposed on such transactions for want of Form F of the Central
Sales Tax are set aside. The petitioners will appear and submit before
the assessing authority a certified copy of this judgment in six weeks to
complete the assessment proceedings with regard to such transactions
only, on its own merits, after examining the transactions between the
parties, and keeping in mind that the assessee is not in a position to
obtain Form F for no fault of his; and
(2)

In the cases where the assessee has been subjected to

reassessment proceedings in which the transactions of job-work and

goods-returned are involved, the reassessment orders only to the extent
that the tax was imposed on such transaction/s for want of Form F of
the Central Sales Tax are set aside. The assessee will appear before
the Reassessing Authority and submit a certified copy of this judgment
in six weeks, to complete the reassessment proceedings in respect of
such transactions only, on its own merits after examining the
transactions between the parties, keeping in mind the findings recorded
earlier on such transactions, and also that the assessee is not in a
position to obtain Form F, for no fault of his.
There will be no order as to costs.
Dt. 1.12.2009
nethra