Supreme Court Judgments — 2016

The Supreme Court held that the view expressed by the Tribunal, and concurred with by the High Court, was defensible and did not warrant interference. The Court analyzed the statutory scheme, particularly Section 4-B(2) and Section 4-B(6). Section 4-B(2) requires that notified goods manufactured from raw material purchased at a concessional rate are 'intended' to be sold within the State, in inter-State trade, or exported. The expression 'intended' refers to the intention after manufacture. Section 4-B(6) specifically deals with cases where a dealer, having purchased goods at a concessional rate, sells the manufactured goods otherwise than by way of sale in the State, inter-State trade, or export. In such cases, the dealer is liable to pay the difference in tax. The Court found that Section 3-B applies when a false or wrong certificate/declaration is made, whereas Section 4-B(6) deals with the inability to comply with the 'intendment' (i.e., inability to sell or export). The intendment of selling or exporting is not treated as a false declaration if Section 4-B(6) consequences are applied. The Court noted that it would not decide whether stock transfer outside the State falls under 'inter-State trade or commerce' as it was not raised or argued. The appeal was dismissed as devoid of merit.