2011 (9) TMI 879 - HC - VAT and Sales Tax

Whether the lower rate of tax applicable under notification dated July 23, 1997 issued under the H.P. GST Act, 1968 to give concession to small-scale industries only, would automatically qualify to the lower rate applicable generally for the purpose of section 8(2A) of the CST Act, 1956 and the Explanation given thereunder? Whether the dealer is not required to submit the mandatory C forms to claim the concessional rate of tax? Whether the provision of the H.P. GST Act, 1968 to claim exemption from tax generally or subject to tax generally at a lower rate would apply automatically under the CST Act and the Explanation given to section 8(2A) of the CST Act, 1956 is to be taken as nonexistent? Held that - In all fairness, learned Senior Additional Advocate-General, appearing on behalf of the State (Excise and Taxation Commissioner, Himachal Pradesh), is not in a position to controvert the submissions advanced by Mr. Khanna, learned senior advocate, for and on behalf of the respondent. In these facts and circumstances, the STR in question, being devoid of legal force, is accordingly dismissed without answering or adjudicating the substantial questions of law, indicated above.

Summary

Issues:
1. Condonation of delay under section 5 of the Limitation Act for sales tax revision.
2. Interpretation of lower rate of tax under notification for small-scale industries.
3. Requirement of submitting C forms for claiming concessional tax rate.
4. Application of H.P. GST Act provisions under CST Act.
5. Adjudication of substantial questions of law in sales tax revision.

Analysis:
The High Court of Himachal Pradesh dealt with a sales tax revision filed by the Excise and Taxation Commissioner, Himachal Pradesh, under section 33(1) of the Himachal Pradesh General Sales Tax Act, 1968, along with a plea for condonation of delay under section 5 of the Limitation Act. The revision raised significant legal questions regarding the interpretation of tax rates applicable to small-scale industries, the necessity of submitting C forms for concessional tax rates, and the alignment of H.P. GST Act provisions with the CST Act.

The case involved M/s. Superior Carbonate & Chemicals, a manufacturer and supplier of calcium carbonate, which faced reassessment leading to a dispute over the tax rate applied on sales made outside the state. The respondent was assessed at 10% tax due to the absence of C forms. The appeal process culminated in the Financial Commissioner (Appeals) accepting the respondent's appeal in 2006, prompting the State/Excise and Taxation Commissioner to file the present sales tax revision in 2008.

The court emphasized the importance of entertaining substantial legal questions only after allowing the condonation of delay. Referring to a previous judgment, the court highlighted the statutory limitation period of 60 days under section 33(1) of the Sales Tax Act for making a statement of case to the High Court, which was not subject to condonation beyond this period.

The court noted that the statutory limitation period prescribed in the Sales Tax Act overrides the provisions of the Limitation Act, restricting the condonation of delay to 60 days for making a case to the High Court. The court cited precedents and legal principles to support its decision to dismiss the sales tax revision as legally insufficient, without delving into the substantive questions of law raised in the case.

In conclusion, the High Court dismissed the sales tax revision due to the failure to meet the statutory time limit for filing, emphasizing the importance of adhering to prescribed timelines in legal proceedings and highlighting the limitations on condonation of delay in such matters.