1994 (4) TMI 302 - SC - VAT and Sales Tax

whether the appellate authority, whether the first or the second appellate authority, has the power to receive form C in appeal and to grant relief, in case the dealer satisfies the appellate authority that he had sufficient cause for not producing the said certificate before the first assessing authority? Held that - Appeal dismissed. Mere use of the words the first assessing authority in sub-rule (7) of rule 12 cannot and does not mean, in the context and scheme of the enactments concerned herein, that the appellate authorities do not have the power to receive form C in appeal. This power can of course be exercised only where sufficient cause is shown by the dealer for not filing them up to the time of assessment before the first assessing authority.

Issues Involved:
1. Applicability of Section 8(4) of the Central Sales Tax Act, 1956.
2. Interpretation of Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957.
3. Powers of appellate authorities to accept Form C declarations post-assessment.
4. Legislative intent behind the proviso to Section 8(4) and Rule 12(7).
5. Jurisdiction of appellate authorities under state sales tax enactments.

Issue-wise Detailed Analysis:

1. Applicability of Section 8(4) of the Central Sales Tax Act, 1956:
The court examined the conditions under which a dealer can avail the lower tax rate prescribed by Section 8(1). It was noted that Section 8(4) mandates that for a dealer to benefit from the lower tax rate, they must furnish a declaration in Form C or a certificate in Form D to the prescribed authority. The court emphasized that compliance with these requirements is essential for the applicability of the lower tax rate.

2. Interpretation of Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957:
Rule 12(7) states that the declaration in Form C must be furnished to the prescribed authority up to the time of assessment by the first assessing authority. The proviso to this rule allows the prescribed authority to extend the time for furnishing such declarations if sufficient cause is shown. The court clarified that Rule 12(7) does not explicitly exclude the appellate authorities from accepting Form C declarations.

3. Powers of appellate authorities to accept Form C declarations post-assessment:
The court addressed whether appellate authorities have the power to accept Form C declarations during the appeal process. It was argued that appellate authorities possess co-extensive powers with the first assessing authority, allowing them to accept Form C declarations if the dealer shows sufficient cause for not furnishing them earlier. The court concluded that appellate authorities could indeed accept these forms, provided the dealer demonstrates sufficient cause for the delay.

4. Legislative intent behind the proviso to Section 8(4) and Rule 12(7):
The court examined the legislative intent behind the proviso to Section 8(4) and Rule 12(7). It was noted that the proviso was introduced to address a lacuna identified in the Sales Tax Officer v. Abraham case, where it was held that the rule-making authority could not prescribe a time limit for filing declarations. The proviso empowers the rule-making authority to prescribe a time limit and allows the assessing authority to extend this time for sufficient cause. The court interpreted this as an indication that the legislature intended to provide flexibility in accepting Form C declarations beyond the initial assessment period.

5. Jurisdiction of appellate authorities under state sales tax enactments:
The court analyzed the jurisdiction of appellate authorities under the Tamil Nadu and Andhra Pradesh sales tax enactments. It was observed that these enactments confer extensive powers on appellate authorities, including the power to confirm, reduce, enhance, or annul assessments, and to receive additional evidence. The court concluded that the appellate authorities under these enactments have the jurisdiction to accept Form C declarations, provided sufficient cause is shown for the delay.

Conclusion:
The court dismissed the appeals filed by the States of Tamil Nadu and Andhra Pradesh, affirming that appellate authorities have the power to accept Form C declarations during the appeal process if the dealer shows sufficient cause for the delay. The court emphasized that this power should be exercised judiciously and not as a matter of course. The judgment reinforces the flexibility and comprehensive jurisdiction of appellate authorities under the relevant sales tax enactments.

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