2013 (1) TMI 702 - HC - VAT and Sales Tax

Suo motu revision case - modification of assessment orders - Held that - The order has apparently been passed ex parte. Three F forms have been disallowed on the purported ground that the three F forms bearing Nos. 37514 37518 and 37521 covered transaction exceeding a period of one month. It appears that the Additional Commissioner Commercial Taxes West Bengal has misconstrued rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules 1957 which provides that the declaration referred to in sub-section (1) of section 6A of the Central Sales Tax Act 1956 shall be in form F. The proviso to rule 12(5) provides that a single declaration might cover transfer of goods by a dealer to any other place of business or agent or principal as the case may be effected during a period of one calendar month. There is nothing in the rules which can be construed to vitiate a declaration form only on the ground that it covers transactions exceeding a period of over one month. The assessment has apparently been revised suo motu and ex parte on a misconception of rule 12(5) of the Rules. The impugned order is thus set aside and quashed.

Summary

Issues:
Challenging order dated December 24, 2010, of Additional Commissioner, Commercial Taxes, West Bengal in a suo motu revision case regarding assessment under Central Sales Tax Act, 1956 and West Bengal Sales Tax Act, 1994 for the period ending March 31, 2003.

Analysis:
The judgment addresses the challenge against an order modifying the assessment passed by the predecessor-in-office under the Central Sales Tax Act, 1956 and West Bengal Sales Tax Act, 1994. The impugned order proposed disallowing a claim of stock transfer under section 6A of the Central Sales Tax Act, 1956 against specific F forms, citing violation of rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957. The disallowed amount was to be subjected to tax at 10% without allowing any statutory deduction. The order was passed ex parte based on the best judgment of the authority.

The judgment delves into the specifics of the transactions covered by the F forms in question, highlighting the total value covered along with a month-wise breakdown. The impugned order revised the assessment by reducing the stock transfer amount and increasing the gross turnover of sales and taxable balance. Tax rates were specified for the revised taxable balances, and the assessing officer was directed to compute fresh taxes payable and issue a revised demand notice accordingly.

The court noted that the order was passed ex parte, and the disallowance of the F forms based on the duration of transactions was misconstrued. Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957 does not invalidate a declaration form solely due to transactions exceeding one month. The assessment revision was deemed erroneous due to a misinterpretation of the rules. Consequently, the impugned order was set aside and quashed, and the writ application was disposed of accordingly. Affidavits were not called for, and the allegations in the application were deemed not admitted.

In conclusion, the judgment provides a detailed analysis of the assessment revision, highlighting the misinterpretation of rules leading to the erroneous disallowance of F forms. The court's decision to set aside the order underscores the importance of adherence to legal provisions in tax assessments and the need for proper interpretation of relevant statutes and rules.