2011 (4) TMI 1254 - HC - VAT and Sales Tax

Whether there is no illegality or infirmity in the impugned order, as the revisionist has not submitted the required forms well within the time? Held that - Considering the peculiar facts and circumstances of the case, the impugned order passed by the Tribunal dated April 19, 2011 is modified to the extent that if the revisionist deposits 10 per cent of the total demanded tax for the assessment year 2005-06 latest by May 15, 2011, 90 per cent of the demanded tax shall be kept in abeyance till disposal of appeal. The revisionist shall furnish security of the stayed amount within 30 days to the satisfaction of the assessing authority. It is further provided that in case demanded amount as per assessment orders has been deposited by the revisionists, the same shall not be adjusted against any other outstanding dues/demand, if any. Trade tax revisions are partly allowed

Summary

Issues involved:
Assessment under U.P. Trade Tax Act and Central Sales Tax Act for the year 2005-06, Extension of time for filing forms C and F, Imposition of tax liability due to non-acceptance of forms C and F, Appeal against the tax levy, Stay granted by Additional Commissioner (Appeals), Second appeal under U.P. VAT Act, Interpretation of rules regarding filing of forms beyond prescribed time.

Analysis:

1. Assessment under U.P. Trade Tax Act and Central Sales Tax Act for the year 2005-06:
The revisionist challenged the order passed by the Commercial Tax Tribunal related to the assessment year 2005-06 under the U.P. Trade Tax Act and Central Sales Tax Act. The revisionist, a public limited company engaged in manufacturing motor vehicles, transferred stock to branch offices and consignment agents outside the State of U.P., requiring forms F under the Central Sales Tax Act. The Commissioner of Trade Tax had issued circulars allowing for an extension of time for filing forms if reasonable grounds existed for the delay.

2. Extension of time for filing forms C and F:
The revisionist faced challenges in obtaining and submitting forms C and F within the stipulated time due to practical difficulties faced by branch offices and consignment agents outside the State. The revisionist filed an application for extension of time for submission of forms C and F and proof of export, but the assessing authority rejected the request, leading to the imposition of a substantial tax liability.

3. Imposition of tax liability due to non-acceptance of forms C and F:
The assessing authority imposed a significant tax liability on the revisionist due to the non-acceptance of forms C and F within the prescribed time. The revisionist contended that the demand arose solely from the non-acceptance of forms and proof of export, despite filing an application for extension of time as per the provisions of the rules.

4. Appeal against the tax levy and Stay granted by Additional Commissioner (Appeals):
The revisionist appealed against the tax levy, and the Additional Commissioner (Appeals) granted a partial stay of the disputed tax amount. Dissatisfied with the order, the revisionist filed a second appeal under the U.P. VAT Act, seeking further relief from the tax liability imposed.

5. Interpretation of rules regarding filing of forms beyond prescribed time:
The revisionist argued that the Act and Rules under the Central Sales Tax Act allowed for filing forms beyond the prescribed time if sufficient cause was demonstrated. The revisionist cited precedents where statutory forms were accepted in appeal even if not furnished before the assessing authority, emphasizing the need for flexibility in accepting forms beyond the stipulated time.

In conclusion, the High Court partially allowed the trade tax revisions, directing the first appellate authority to decide the appeals by a specified date. The judgment highlighted the importance of considering practical difficulties faced by taxpayers in filing forms within the prescribed time and the need for assessing authorities to exercise discretion in extending time for submission based on valid reasons.