2010 (2) TMI 1085 - HC - VAT and Sales Tax

Rejection of C forms filed by the dealer in respect of the assessment made for the years 2006-07, 2007-08 and 2008-09, respectively, on the ground that the C forms were filed belatedly by the dealer Held that - The instruction insists that sufficient cause spoken of in section 8(4) is sufficient cause which appeals to the mind of the authority concerned and which enables it to allow further time without bothering about any onus on the assessees. Hence, even if the dealer fails to explain the reason for the delay, the respondent has to independently apply his mind and decide about the C forms, without insisting the onus on the assessee. Thus when the law is well-settled in respect of filing C forms, authorities shall independently decide irrespective of the fact assessee has explained the reasons for the delay or not. Hence, on the face of it, the impugned order of the respondent is unsustainable and is liable to be set aside with liberty to the respondent to pass appropriate orders.

Summary

Issues:
Challenge to rejection of C forms for assessment years 2006-07, 2007-08, and 2008-09 based on delay in filing; Interpretation of rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules 1957; Application of the doctrine of "sufficient cause" in allowing further time for filing C forms; Compliance with circular issued by Assistant Commissioner of Commercial Tax, Chepauk, Chennai; Precedents set by the High Court of Madras and Supreme Court regarding the interpretation of section 8(4) of the CST Act.

Analysis:
The judgment by the High Court of Madras dealt with the rejection of C forms filed by a dealer for the assessment years 2006-07, 2007-08, and 2008-09 due to alleged delay in submission, citing rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules 1957. The court emphasized the importance of the doctrine of "sufficient cause" in allowing further time for filing C forms, as per the circular issued by the Assistant Commissioner of Commercial Tax, Chepauk, Chennai. The circular instructed assessing officers to be liberal in reopening or reassessing cases where C forms were belatedly submitted, without placing the onus solely on the assessee to prove reasons for the delay. This approach was supported by the Full Bench judgment of the High Court of Madras in the case of State of Tamil Nadu v. Arulmurugan and Company, which was later approved by the Supreme Court in State of Andhra Pradesh v. Hyderabad Asbestos Cement Production Ltd.

The court highlighted that the assessing officers have the statutory power to permit filing of declarations and forms within further time for sufficient cause, as recognized under section 8(4) of the CST Act. The judgment in Vispro Foundary Engineering Limited v. Commercial Tax Officer, Adyar Assessment Circle, Madras further clarified that the assessing officers should independently decide on the cause for the delay in filing C forms, based on implied and ancillary powers, rather than imposing a strict burden of proof on the assessee. The court emphasized that appellate authorities also have the authority to extend the time for filing declarations, indicating a flexible approach towards compliance with statutory requirements.

In conclusion, the court held that the assessing authorities must independently decide on the acceptance of C forms, regardless of whether the assessee provided reasons for the delay. The impugned order rejecting the C forms was deemed unsustainable, and the respondent was directed to pass appropriate orders within twelve weeks, considering the legal position and precedents established by the High Court of Madras and the Supreme Court. The writ petitions were allowed on these grounds, with no costs awarded, and the connected matters were closed.