Vehicles sales concludes at a place where registration takes place

Brief of the case:

• The Hon’ble Supreme Court in the case of Commissioner of Commercial Taxes vs. M/s KTC Automobiles held that in case of motor vehicles the registration and sale is a co-terminus activity.
• Thus, the place of registration is deemed as place at which sale gets concluded. Accordingly, the sales tax has to be paid as per the law in force in the state/Union Territory at which sales so concludes.
  

Facts of the case:

• The assessee is engaged in the business of purchase and sale of Hyundai cars manufactured by Hyundai Motors Limited, Chennai. Assessee dealer is having head office at Kozhikode (Calicut), Kerala with a branch office at Mahe , Pondicherry. The year under dispute is Assessment Year 1999-2000.
• A sales tax departmental inspection was made at the HO in which the officer found that the assessee had wrongly shown 263 number of cars as sold from its Mahe Branch by wrongly arranging registration from Mahe and wrongly collected and remitted tax for those transactions under the provisions of Pondicherry Sales Tax Act.
• According to the Intelligence Officer, the sales were concluded at Kozhikode and hence the vehicles should have been registered within the State of Kerala. Therefore, by showing the sales at Mahe the assessee had failed to maintain true and complete accounts as an assessee under the KGST Act and had evaded payment of tax to the tune of Rs.86 lakhs. The Intelligence officer in his order levied a penalty of Rs. 86 lacs. On appeal to Deputy Commissioner , the appeal was allowed.

• Against the appellate order in favour of assessee, the Commissioner of Commercial Taxes initiated a suo-motu  proceeding in exercise of power under Section 37 of the KGST Act and passed a final order on 12.8.2002 setting aside the appellate order and restoring the original order of penalty passed by the Intelligence officer.
• Assessee again appealed before High court , the HC also decided the case in favour of assessee. Aggrieved revenue is in appeal before Hon’ble Supreme Court.
  

Contention of the Assessee: