2010 (2) TMI 1061 - HC - VAT and Sales Tax

Whether there could not be any tax liability if the F forms produced before the authority, are examined properly? Held that - Issuance of the F forms by the appropriate authorities, where the buyers are carrying on business, gives rise to a conclusive presumption that there has been movement of goods and sale took place; of course the same are not established to be forged document. Unless enquiry is made, question of forgery cannot be regarded. From all the orders we do not find any findings why these documents were rejected and not accepted. In the event, the appellants/petitioners deposit a sum of ₹ 1,20,000 (one lakh twenty thousand), within a period of one month from date, then on an application being made enclosing all the original F forms with regard to the transactions with Sarbasree Ma Enterprise (Aurangabad), Bihar, the revising authority will examine whether these documents are genuine or not. Upon scrutiny if the documents are found to be genuine, he will take note of the same and will grant appropriate relief in accordance with law and the tax deposited shall be refunded, if no other tax liability is there. In the event, the appellants/petitioners deposit a sum of ₹ 1,20,000 (one lakh twenty thousand), within a period of one month from date, then on an application being made enclosing all the original F forms with regard to the transactions with Sarbasree Ma Enterprise (Aurangabad), Bihar, the revising authority will examine whether these documents are genuine or not. Upon scrutiny if the documents are found to be genuine, he will take note of the same and will grant appropriate relief in accordance with law and the tax deposited shall be refunded, if no other tax liability is there.

Summary

Issues involved:
Appeal against dismissal of writ petition on grounds of res judicata; Challenge to tax liability based on rejection of F forms; Question of movement and transportation of goods covered by F forms; Application of res judicata principle; Constitutional right to exemption from tax; Examination of genuineness of F forms; Directions to revising authority for examination and decision on F forms; Payment of deposit and refund of tax liability; Imposition of interest and penalty if F forms found to be not genuine; Granting liberty to lodge complaint for forgery; Payment of costs by appellants/petitioners.

Analysis:
The case involved an appeal against the dismissal of a writ petition on the grounds of res judicata. The appellant, a manufacturer and dealer under the sales tax statute, challenged the tax liability based on the rejection of F forms. The assessing officer and appellate authority found no evidence of movement of goods covered by the F forms, leading to the claim being disallowed. The revising authority concluded that the F forms were fake, which was challenged in the present writ petition. The court emphasized the presumption of movement of goods when F forms are issued, unless proven otherwise.

The court rejected the application of res judicata, noting that the earlier order did not address the acceptability of F forms for Bihar transactions. The appellants' Constitutional right to exemption from tax based on valid documents was highlighted. The court directed the revising authority to examine the genuineness of the F forms and make a decision accordingly. If found genuine, the tax deposited would be refunded, but interest and penalties would apply if the forms were deemed fake. The revising authority was also granted liberty to lodge a complaint for forgery.

The appellants were directed to pay a deposit and costs, with a timeframe for compliance. Failure to make the deposit would result in the dismissal of the appeal. The court stressed the need for justice and diligence in resolving the matter promptly. The judgment aimed to balance the rights of the parties while ensuring compliance with tax laws and procedures.