2015 (10) TMI 2510 - HC - VAT and Sales Tax

Inter-state sale - failure to submit C Forms and F forms - under the CST Act, certain turnovers which have been claimed on account of export as well as inter-State sales have been rejected for granting exemption as the assessee/dealer did not substantiate the same by filing necessary declarations as required under section 6A read with rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 ( the Rules , for short). - Held that - A liberal approach ought to have been adopted, though statutorily a period of three months has been prescribed for filing of declaration in terms of section 6A read with rule 12(7) of the Rules. How- ever, the very fact that a discretion had been given to the assessing officer to make an exception to the rule would itself indicate that the same need not be viewed in a rigid manner. In that view of the matter, the endorsements dated July 25, 2015 cannot sustain so far as the issue with regard to the C forms is concerned. - Matter remanded back for considering C Form and passed the modified orders.

Summary

Issues:
Assessment under CST Act for years 2008-09 and 2010-11, rejection of turnovers claimed for exemption, submission of C declaration forms post-assessment, rejection of request for reconsideration, interpretation of C forms requirement, discretion of assessing officer, validity of endorsements dated July 25, 2015.

Analysis:
The writ petitions challenge the endorsements dated July 25, 2015, by the second respondent regarding the assessment of the petitioner under the CST Act for the years 2008-09 and 2010-11. The assessment orders raised demands of Rs. 20,66,391 for 2010-11 and Rs. 8,79,285 for 2008-09, rejecting certain turnovers claimed for exemption due to lack of necessary declarations under section 6A and rule 12 of the Central Sales Tax Rules, 1957. Subsequently, the petitioner submitted C declaration forms post-assessment, which were not initially considered. The impugned endorsements rejected the petitioner's request for reconsideration, deeming the reasons provided as unconvincing.

The court considered the precedent set in the case of Godrej Agrovet Ltd., emphasizing the importance of C forms even if filed after the assessment order. The purpose of C forms is to confirm the movement of goods between states for taxation at a reduced rate under the CST Act. While a three-month filing period is prescribed, the assessing officer has discretion to make exceptions. The court stressed a liberal approach in such cases, indicating that rigid adherence to timelines may not be necessary. Consequently, the endorsements of July 25, 2015, were deemed unsustainable concerning the issue of C forms.

As a result, the court set aside the endorsements and directed the second respondent to consider the C forms submitted by the petitioner, modifying the assessment orders within six weeks. The court clarified that the order pertained solely to C forms. Subsequently, the writ petitions were disposed of without costs, and any pending miscellaneous petitions were to be closed.