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2011 (9) TMI 886 - HC - VAT and Sales TaxProvisional assessment orders - Held that - In the instant case, opposite party No. 3 being aware of the fact that he himself had not issued the declaration forms to TATA from whom the petitioner is to obtain the said forms to furnish before him, he should not have rejected the petitioner s application dated April 20, 2011 and passed the provisional order of assessment on the very same day. This action of opposite party No. 3 is not certainly fair and reasonable and in consonance with the provisions of rule 12(7) of the CST (R & T) Rules and 12(1)(b) of the CST (O) Rules. In view of the above, the provisional assessment orders passed under annexure 3 series and notice issued in terms of section 51 of the VAT Act under annexure 5 are quashed. Opposite party No. 3 is directed to examine the petitioner s claim of sale under section 6(2) of the CST Act in accordance with law taking into consideration the declaration forms/certificates produced by the dealer-petitioner and pass appropriate orders. With the aforesaid observation/direction, the writ petition is allowed.
Issues Involved:
1. Quashing of provisional assessment orders dated April 20, 2011. 2. Quashing of notice dated July 27, 2011 issued under Section 51 of the Orissa Value Added Tax Act, 2004. 3. Issuance of a writ of mandamus directing the Deputy Commissioner of Sales Tax to consider the effect of filing the wanting C forms. Issue-wise Detailed Analysis: 1. Quashing of Provisional Assessment Orders Dated April 20, 2011: The petitioner, a registered dealer under the OVAT Act, was involved in a works contract with TATA Steel Ltd. for handling iron ore dispatch. The petitioner procured plants and machinery through inter-State trade and sold these goods to TATA, requiring TATA to furnish C forms for tax exemption. The petitioner failed to submit the C forms along with quarterly returns for March, June, and September 2010 due to non-receipt from TATA. Despite multiple notices and extensions, the petitioner could not furnish the C forms by the deadlines. Consequently, the assessing authority passed provisional assessment orders on April 20, 2011, raising a tax demand of Rs. 1,29,59,491. The court examined Rule 12(7) of the CST (Registration and Turnover) Rules, 1957, and Rule 7A and Rule 12(1)(b) of the CST (O) Rules, 1957, which allow the assessing authority to permit further time for furnishing declaration forms if prevented by sufficient cause. The court found that the petitioner had sufficient cause, as the delay was due to the assessing authority's failure to issue C forms to TATA, which in turn delayed TATA's provision of the forms to the petitioner. The court held that the assessing authority acted arbitrarily and in haste, violating principles of natural justice, and quashed the provisional assessment orders. 2. Quashing of Notice Dated July 27, 2011 Issued Under Section 51 of the Orissa Value Added Tax Act, 2004: Following the provisional assessment, the assessing authority issued a notice under Section 51 of the OVAT Act for the recovery of the demanded tax. The court found that since the provisional assessment orders were quashed, the notice for tax recovery based on those orders was also invalid. Therefore, the notice dated July 27, 2011, was quashed. 3. Issuance of a Writ of Mandamus Directing the Deputy Commissioner of Sales Tax to Consider the Effect of Filing the Wanting C Forms: The petitioner submitted the required C forms on July 16, 2011, after receiving them from TATA. The court directed the Deputy Commissioner of Sales Tax to examine the petitioner's claim of sale under Section 6(2) of the CST Act, taking into consideration the declaration forms produced. The court emphasized that the discretion vested in the assessing authority to permit further time for filing declaration forms must be exercised judiciously, fairly, and reasonably. Conclusion: The court allowed the writ petition, quashing the provisional assessment orders and the subsequent recovery notice. It directed the Deputy Commissioner of Sales Tax to re-examine the petitioner's claims in light of the submitted C forms, ensuring a fair and just assessment process. No order as to costs was made.
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