2011 (7) TMI 1079 - HC - VAT and Sales Tax

Whether the petitioner is not eligible to be issued H forms? Held that - Mere issue of H forms does not mean anything, much less doing it entail the benefit under section 5(3) read with section 5(4) of the CST Act being extended to the assessee. Be it the exporter, or the dealer who is the penultimate exporter, cannot claim any benefit under section 5(3) of the CST Act merely on the ground that, at the request of the former, H forms were supplied by the notified authority without demur. Along with the reply affidavit, the petitioner has placed before this court various export orders during the three assessment years which, according to the petitioner, were placed by the foreign buyer prior to the petitioner s purchase of rice from local millers. This is a matter to be gone into by the assessing officer at the time of assessment, not at the stage of issuing H forms. Subject to above observations, we dispose of the writ petition directing the first respondent to issue H forms to the petitioner within a period of ten (10) days from the date of receipt of a copy of this order.

Summary

Issues:
- Rejection of request for issuance of H forms by the first respondent
- Interpretation of rules regarding the issuance of H forms under the Central Sales Tax (Andhra Pradesh) Rules, 1957
- Validity of denying H forms based on lack of proof of export orders at the time of issuance
- Consideration of export orders and purchase timing at the assessment stage

Analysis:
The petitioner challenged the rejection of their request for 500 H forms by the first respondent, arguing that the refusal was unjustified. The petitioner, a company engaged in rice export, contended that the first respondent cannot deny H forms based on the nature of purchases made for export. The petitioner maintained that the assessment of local dealers should determine the eligibility for H forms, not the timing of export orders. The first respondent justified the rejection citing a report that alleged the petitioner purchased rice before receiving export orders, thus questioning their eligibility for CST Act exemption.

The court analyzed Rule 9 of the AP Rules, emphasizing that the purpose of H forms is to facilitate proof of export or sale for export at the assessment stage, not at the time of issuance. The court clarified that the requirement for proof of export orders does not apply during the issuance of H forms. While H forms are necessary for CST Act benefits, their issuance does not automatically confer such benefits. The court highlighted that the assessing officer can reject H forms during assessment if necessary, despite their initial issuance.

The court acknowledged the report alleging pre-export rice purchases by the petitioner but refrained from definitively deciding on the validity of denying H forms in such circumstances. The court directed the first respondent to issue the requested H forms within ten days, emphasizing that the timing of export orders in relation to local purchases should be assessed during the evaluation of the petitioner's case, not at the H form issuance stage. The judgment underscored that the assessing officer retains the authority to scrutinize and potentially reject H forms based on the circumstances of the case.