1998 (10) TMI 524 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Concessional rate of sales tax.
2. Issuance of Form "D".
3. Statutory and contractual obligations.
4. Validity of the assessment.
5. Delay and laches.

Detailed Analysis:

1. Concessional Rate of Sales Tax:
The petitioner, a Himachal Pradesh PWD contractor, executed various works from 1987 to 1991. The grievance was that the Commissioner, Excise and Taxation, did not permit the concessional rate of 4% sales tax for sales made to the Government due to the absence of Form "D", resulting in a 7% tax rate. The petitioner sought relief to pay the tax at the concessional rate of 4%.

2. Issuance of Form "D":
The petitioner claimed that despite requests and notices, respondents Nos. 4 to 6 did not issue Form "D", which was necessary for availing the concessional tax rate. The respondents argued that the concessional rate could only be applied if the certificate in Form "D" was furnished by the dealer to the assessing authority.

3. Statutory and Contractual Obligations:
Respondents Nos. 1, 4, and 5 argued that the relationship with the petitioner was governed by a contract that did not provide for issuing Form "D". They cited clause 38 of the contract, which stated that sales tax on materials was payable by the contractor and that the Government would not entertain any claims regarding this. Respondent No. 6's stand was similar, pointing out that the contract did not include provisions for issuing Form "D".

4. Validity of the Assessment:
The petitioner argued that the assessment finalized on February 13, 1995, was incorrect due to the non-issuance of Form "D", which led to the higher tax rate. The court noted that the concessional rate of 4% was applicable if Form "D" was furnished, and the denial of this form by respondents Nos. 4 to 6 was unjustified.

5. Delay and Laches:
Respondents raised preliminary objections regarding delay and laches, questioning the maintainability of the petition. The petitioner countered that the cause of action arose on February 13, 1995, when the assessment was finalized, thus the petition was timely.

Judgment:
The court held that the department was bound to issue Form "D" to enable the petitioner to avail the concessional tax rate. The court rejected the respondents' technical argument that there was no statutory or contractual obligation to issue Form "D". The court directed respondents Nos. 4 to 6 to issue the requisite certificate (Form "D") and instructed the assessing authority to review the assessment in light of the issued certificate. The interim order staying recovery would continue until the review was completed. The writ petition was allowed, with no order as to costs.