2010 (7) TMI 894 - HC - VAT and Sales Tax

Whether after the pre-assessment notice was issued, the petitioner had submitted their objections and requested time for production of form F from the Mumbai office in respect of the branch transfer? Held that - The impugned order to that extent, disallowing the exemption for an amount of ₹ 40,47,000 has to be held to be vitiated. The Division Bench has held that when a request for extension is either granted or rejected, intimation thereon should be given to the assessee then and there. Therefore, the explanation sought to be given by the respondent in the counter-affidavit that the order of assessment was passed much after the period is no ground to justify their action. Thus, the order of the Division Bench fully supports the case of the petitioner and they are entitled to succeed

Issues:
1. Quashing of assessment order under Central Sales Tax Act, 1956.
2. Disallowance of exemption for non-production of form F in branch transfer.
3. Consideration of extension request for form F submission.
4. Application of previous Division Bench judgment on time extension.

Analysis:

1. Quashing of assessment order under Central Sales Tax Act, 1956:
The petitioner sought a writ of certiorarified mandamus to quash the assessment order passed by the respondent under the Central Sales Tax Act, 1956. The assessment order dated March 31, 2006, proposed to disallow exemption for non-production of form F in branch transfers to Mumbai and Pondicherry. The petitioner challenged this order, leading to the present legal proceedings.

2. Disallowance of exemption for non-production of form F in branch transfer:
The respondent's assessment order proposed to disallow exemption due to the non-production of form F in the case of branch transfers. The petitioner, a dealer in spices and kirana, submitted replies and form F declarations for Pondicherry branch but faced difficulties obtaining the form from the Mumbai branch. Despite requesting an extension until April 15, 2005, the assessment order confirmed the disallowance for the Mumbai branch transfer. The petitioner contended that their representation for time extension was not considered, leading to the challenge before the court.

3. Consideration of extension request for form F submission:
The petitioner's senior counsel argued that the authority failed to consider their request for an extension to produce form F from the Mumbai branch. The Government Advocate contended that since no evidence was provided to fulfill the condition for non-furnishing form F, the assessment order was valid. However, the court noted that the order was passed without explicitly accepting or rejecting the extension request, contrary to established legal principles.

4. Application of previous Division Bench judgment on time extension:
The court referred to a previous Division Bench judgment that emphasized the importance of promptly communicating decisions on extension requests to the assessee. In this case, the petitioner's request for extension until April 15, 2005, was not explicitly addressed in the assessment order passed on March 31, 2006. Following the precedent set by the Division Bench, the court held that the failure to communicate the decision on the extension request vitiated the order disallowing the exemption for the Mumbai branch transfer. Consequently, the court ruled in favor of the petitioner based on the principles established in the previous judgment.

In conclusion, the court granted the writ petition, quashing the assessment order to the extent it disallowed the exemption for the Mumbai branch transfer, citing the failure to address the extension request in accordance with legal precedents.

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