Case Law Details
I. T. I. Ltd Vs State of Kerala (Kerala High Court)
In the legal case of I. T. I. Ltd versus the State of Kerala before the Kerala High Court, the issue centered around the eligibility of exemption for transit sales of goods purchased in 2001-02 but sold in 2002-03. The court reviewed the decision of the Tribunal, which concluded that the petitioner’s claim for exemption on transit sales was unsupported by the necessary documentation.
The Tribunal’s ruling was based on the requirement that sales in transit must be evidenced by statutory forms, specifically Form-E1 under the Central Sales Tax (Registration and Turnover) Rules. However, the petitioner had submitted E-Forms related to sales made in 2002-03 to support their claim for exemption, which was for the assessment year 2001-02. Consequently, the Tribunal determined that subsequent sales in 2002-03 could not be considered transit sales of goods purchased in 2001-02, as the transportation of the goods was completed in the earlier year.
The petitioner argued that copies of relevant E Forms accounted for in subsequent years could be produced for verification. However, the Court rejected this argument, emphasizing that the claim for exemption on transit sales must demonstrate that the sales occurred while the goods were in transit. Since the E1 Forms relied upon were accounted for in a subsequent year, they could only pertain to sales completed after the transportation of the goods, not while they were in transit.
Consequently, the Court upheld the Tribunal’s decision, ruling against the petitioner and in favor of the revenue. This decision was based on the failure of the petitioner to provide sufficient evidence to justify their claim for exemption on transit sales.
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