2013 (4) TMI 681 - HC - VAT and Sales Tax

Rejection of set of four F forms filed - Held that - Bare perusal of F forms and its annexures shows that the authorities of Maharashtra had committed a bona fide mistake that had not added the total amount, which is mentioned in few pages in all these four forms. Once it is brought to the notice being convinced about the mistakes they have committed, which is rectified by making necessary corrections, the authority which was under obligation to communicate of its counterpart to verify the corrections, has neither written a letter nor applied its mind to the F forms and blindly rejected the said forms as invalid. The impugned order dated January 17, 2013, is clear that the authorities are over-emphasized to collect the tax as possible before the end of financial year and have passed these orders and ex facie orders are illegal. In fact, now the assessee has also obtained a certificate from the Maharashtra sales tax authority stating that the corrections in the values of F forms, are done by the authorities of sale tax and they are genuine. Appeal allowed.

Issues:
1. Availability of alternative and efficacious remedy by way of statutory appeal against assessment order.
2. Validity of F forms submitted for inter-State stock transfer.
3. Failure of authorities to verify alterations in F forms with Maharashtra Sales Tax Department.
4. Allegation of illegal orders passed by authorities to collect tax before the end of the financial year.
5. Justification of interference by the court in the orders of the learned single judge and assessing authority.

Issue 1:
The writ appeal was filed against the order declining interference with the writ petition due to the availability of an alternative and efficacious remedy by way of a statutory appeal against the assessment order passed under relevant tax laws. The court noted the history of the case, which had undergone multiple rounds of litigation. The appellant argued that the corrections made in the F forms were genuine and attested by the Maharashtra Sales Tax Department. The court found that the authorities failed to verify the alterations in the F forms with the Maharashtra Sales Tax Department as per established practice, leading to the unjust rejection of the forms. The court held that the learned single judge was not justified in ignoring the ex facie illegality of the orders and interfering with the appeal, ultimately setting aside the orders and remanding the matter back to the assessing authority.

Issue 2:
The main contention revolved around the validity of the F forms submitted for inter-State stock transfer. The assessing authority had deemed the F forms defective and invalid, resulting in a significant demand for tax, interest, and penalty. The appellant argued that the corrections made in the F forms were genuine and supported by a certificate from the Maharashtra sales tax authority. The court observed that the Maharashtra authorities had rectified their mistakes in the forms upon being notified, emphasizing that the forms should not have been rejected without proper verification. The court directed the assessing authority to reconsider the matter based on the certificate obtained from the Maharashtra sales tax authority to establish the validity and genuineness of the corrections.

Issue 3:
The court highlighted the failure of the authorities to verify the alterations in the F forms with the Maharashtra Sales Tax Department, as required by practice. Despite the corrections being genuine and attested by the Maharashtra authorities, the assessing authority blindly rejected the forms as invalid, emphasizing the need for proper verification before making such decisions. The court criticized the authorities for over-emphasizing tax collection before the end of the financial year, leading to the issuance of illegal orders. The court intervened to rectify the situation and ensure that the appellant, a law-abiding taxpayer, received relief from the unjust demands.

Issue 4:
The court addressed the allegation of illegal orders passed by the authorities to collect tax before the end of the financial year, leading to the unjust rejection of the F forms and imposition of tax, interest, and penalty. The court emphasized the need for proper verification of corrections in the forms and criticized the authorities for their haste in tax collection, which resulted in erroneous decisions. The court intervened to correct the situation and provide relief to the appellant, who had promptly paid taxes in accordance with the law.

Issue 5:
The court justified its interference in the orders of the learned single judge and the assessing authority based on the ex facie illegality of the decisions made. The court set aside the orders, remanded the matter back to the assessing authority, and directed them to consider the certificate obtained from the Maharashtra sales tax authority to verify the corrections in the F forms. While considering imposing costs on the assessing authority for their negligent actions, the court refrained from doing so based on assurances from the Additional Government Advocate regarding improved diligence in following directives. The court issued directions to the Commissioner for Commercial Taxes to ensure compliance with orders and take appropriate action against erring officers.

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