Law: Sales Tax Act, 1990

Section: 3,6,7,11,22,23,26,46

Sales Tax Act (VII of 1990)----Ss. 3, 6, 7, 11, 22, 23, 26 & 46---Liability to pay sales tax---Claim for input tax adjustment in respect of destroyed goods by fire---During the course of audit it was observed that the appellant consumed yarn packed in Polypropylene bags and paper cones, but no disposal of empty bags/paper cones had. been shown in sales tax record; nor any payment of sales tax was shown on those sales; it was alleged that appellant had violated the provisions of Ss. 3, 6, 7, 11, 22, 23 & 26 of Sales Tax Act, 1990 and had suppressed the sales as well as tax payable along with additional tax---Claim of appellant for input tax adjustment on goods which were destroyed by fire, was also objected to by the department---Appellant was engaged in the sale and supply of textile goods and not in the sale and supply of Polypropylene bags and paper cones---Appellant consumed yarn packed in bags and paper cones and supplied those to registered persons who retained the cones and bags for disposal---Department could not prove that said items were returned to the appellant---Department had constructed its case merely on presumptions-Appeal on the issue of empty bags and wastage of paper cones, was accepted holding that no Sales Tax was recoverable on those items---Appellant's yarn stocks on which input tax was claimed was destroyed due to fine---As per S.7 of Sales Tax Act, 1990, a registered person was entitled to deduct input tax paid during the period for the purpose of taxable supply made or to be made by him from the output tax---Appellant had rightly claimed input tax credit incurred with regard to goods destroyed by fire---Impugned order-in-original was set aside, in circumstances. Messrs Mayfair Spinning Mills Ltd.'s PTCL 2002 CL 115 ref. ORDER RAJA LEHRASSAB KHAN (JUDICIAL MEMBER).---Through this order, I intend to dispose of- above captioned appeal pertaining to a taxpayer, arising out of Order-in-Original No.31 of 2002, passed by the Deputy Collector (Adjudication). 2. I have heard both sides and have perused the available record. 3. The relevant facts in brief are that the appellant in this case is a private limited company engaged in supply…

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