2010 (9) TMI 981 - HC - VAT and Sales Tax

Whether the declaration in form ST 15 produced by the applicant at the time of original assessment can be disallowed by the revisional authority on the ground that the same had been stolen from the store of DETC Faridabad (East)? Whether the declaration forms in question were not liable to be accepted by the revisional authority in view of the Department s instructions issued by circular No. 3623/ST dated July 28 1976 inasmuch as the name and address of the dealer to whom the said forms were issued along with their RC No. and the official seal of the Department had been affixed thereon which particulars were required to be filled up by the Assessing Authority issuing the said forms and on the basis of which the petitioner was entitled to presume that the said declaration forms must have been issued by the concerned Assessing Authority to the dealers who had furnished the same to the petitioner? Whether in view of the law laid down by the honourable Supreme Court in the case of Chunni Lal Parshadi Lal v. Commissioner of Sales Tax U.P. reported as 1986 (3) TMI 297 - SUPREME COURT OF INDIA the applicant had discharged its onus by producing the declaration forms in question and the revisional authority therefore could not reject or disallow the same? Whether the revisional authority had exceeded his powers of suo motu revision under section 40 of the HGST Act by making independent enquiries in the matter and taking into consideration material which was not before the assessing authority at the time of framing the original assessment order? Whether the revisional authority could exercise powers of suo motu revision in a case where reassessment under section 31 of the Act had become time-barred by making independent investigation and taking into consideration material which was not before the assessing authority thus indirectly passing an order of the reassessment which it could not have done directly? Whether in the facts and circumstances of the case suo motu revision under section 40 of the HGST Act has become time-barred? Whether the revisional authority could validly exercise powers of suo motu revision under section 40 of the Act on a reference made by the successor-assessing authority? Held that - The finding recorded by the revisional authority clearly is that the declaration forms were not genuinely obtained. The dealer had failed to satisfy itself that the purchasers were registered dealers. In such circumstances inference could be drawn that goods were transferred in some other manner and shown as sale to registered dealers. The findings concurrently recorded by the revisional authority and the Tribunal having not been shown to be perverse the question that the decision arrived at is legal cannot be held to be untenable. As regards non-compliance of rule 21 with regard to circulating the loss of forms even if this information was not circulated it cannot be held that the dealer s claim for deduction from the taxable turnover on the ground of sale being to registered dealer was established. Questions 1 to 3 have thus to be decided against the dealer. As a consequence thereof question 4 has also to be held against the dealer. As regards question 5 the revisional order being permissible under section 40 mere fact that the reassessment was not permissible did not affect the jurisdiction of the revisional authority. Question 6 has not been pressed by learned counsel for the petitioner. As regards question 7 the revisional authority had suo motu power. Merely because reference was made by the assessing authority did not take away the jurisdiction to exercise suo motu jurisdiction. The said question is answered against the dealer.

Issues:
1. Disallowance of declaration forms produced by the applicant.
2. Acceptance of declaration forms by the revisional authority.
3. Discharge of onus by producing declaration forms.
4. Exceeding powers of suo motu revision by the revisional authority.
5. Exercise of suo motu revision powers in a time-barred case.
6. Time-barred suo motu revision under section 40 of the HGST Act.
7. Validity of exercising powers of suo motu revision on a reference.

Issue 1: Disallowance of Declaration Forms:
The assessee's claims based on ST 15 forms were disallowed by the revisional authority due to alleged theft of the forms. The authority found that the forms were not genuinely obtained, and the goods were disposed of in a manner inconsistent with the declarations. The Tribunal affirmed this decision, emphasizing that the forms were stolen and procured clandestinely. The dealer failed to prove the movement of goods and payment receipts, leading to the conclusion that sales were misrepresented. The absence of official notification regarding the forms' status did not establish the claim's validity.

Issue 2: Acceptance of Declaration Forms:
The dealer contended that the deduction for sales to registered dealers should not have been disallowed based on stolen forms. However, the court held that the furnishing of declarations by purchasing dealers is not conclusive evidence of genuine sales. The assessing authority has the discretion to assess sales based on all available evidence, as discussed in the Chunni Lal Parshadi Lal case, where the burden of proof lies on the dealer to establish the legitimacy of transactions.

Issue 3: Discharge of Onus by Producing Declaration Forms:
The dealer argued that by producing the required forms, they had fulfilled their obligation. However, the court emphasized that mere production of forms does not absolve the dealer from proving the authenticity of sales to registered dealers. Failure to provide evidence of goods movement and payment receipt undermined the claim's credibility.

Issue 4: Exceeding Powers of Suo Motu Revision:
The revisional authority's independent inquiries and consideration of new material raised concerns about exceeding the scope of suo motu revision under section 40 of the HGST Act. The authority's actions, including investigations not present during the original assessment, were questioned for potentially overstepping the prescribed powers.

Issue 5: Time-barred Suo Motu Revision:
Despite the reassessment being time-barred, the revisional authority's exercise of suo motu revision powers was deemed permissible. The authority's ability to conduct independent investigations and consider additional evidence, even in a time-barred reassessment scenario, was upheld as within the scope of section 40.

Issue 6: Time-barred Suo Motu Revision under Section 40:
The dealer did not press this issue, indicating a lack of argument or contention regarding the time-barred nature of the suo motu revision under section 40 of the HGST Act.

Issue 7: Validity of Exercising Powers of Suo Motu Revision:
The revisional authority's ability to exercise suo motu revision powers, even on a reference from the assessing authority, was upheld. The reference made by the assessing authority did not diminish the revisional authority's jurisdiction to initiate suo motu revision. This issue was decided against the dealer.

In conclusion, the court dismissed the dealer's contentions, affirming the revisional authority's decision to disallow the claims based on stolen declaration forms. The burden of proof regarding the authenticity of sales to registered dealers rested on the dealer, who failed to substantiate their claims adequately. The court upheld the revisional authority's findings and the Tribunal's decision, emphasizing the importance of providing concrete evidence to support claims in tax assessments.

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