2014 (7) TMI 404 - HC - VAT and Sales Tax

Claiming exemption from sales tax / CST on the basis of duplicate portion of C form - requirement of C-Form towards tax paid material - original C forms are with the Department and the same were filed in the case of marketing division of the assessee and this fact is admitted by the Department in their return - Concesstional rate of tax - Held that - Assessee had filed the original part of the declaration in C form in assessment case of manufacturing division and the duplicate parts thereof were filed along with the appeal filed by the trading division of the assessee-company and in view of the law laid down by the Division Bench in the case of Manganese Ore (India) Ltd. v. Commissioner of Sales Tax, Madhya Pradesh 1989 (1) TMI 351 - MADHYA PRADESH HIGH COURT , the assessee was entitled to concessional rate of tax - In return it has been admitted by the Revenue that the form C was available with the Department in the matter of manufacturing division, the benefit of the same can be extended in respect of another division (trading division). She submitted that the apex court has held the requirement of submitting the original C form and, therefore, the order passed by the revisional authority is legal and proper and prayed for dismissal of the writ petition. - Decided in favor of assessee.

Issues Involved:
1. Requirement of original C forms for claiming tax exemption.
2. Compliance with Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957.
3. Applicability of Madhya Pradesh Sales Tax (Central) Rules, 1957.
4. Validity of duplicate C forms for tax exemption.
5. Precedents and judicial interpretations relevant to the case.

Issue-wise Detailed Analysis:

1. Requirement of Original C Forms for Claiming Tax Exemption:
The primary issue was whether the submission of original C forms is mandatory for claiming tax exemption under the Central Sales Tax Act, 1956. The assessee argued that the requirement of submitting original C forms is directory and not mandatory. The court referred to Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957, which requires furnishing of C forms but does not explicitly mandate the submission of the original form. The court cited the precedent set in Manganese Ore (India) Ltd. v. Commissioner of Sales Tax, which held that filing the duplicate part of the C form suffices for compliance.

2. Compliance with Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957:
The court examined Rule 12(1) and noted that it requires the declaration in C form but does not specify that the original must be submitted to the assessing officer. The rule's purpose is to ensure that the inter-State sales are accounted for, and the form's nomenclature (original, duplicate, counterfoil) is for administrative convenience.

3. Applicability of Madhya Pradesh Sales Tax (Central) Rules, 1957:
The Madhya Pradesh Sales Tax (Central) Rules, 1957, under Rule 8(2), require the submission of the original C form for claiming exemption. The court noted that these rules are subordinate to the Central Sales Tax Act and cannot override its provisions. The court emphasized that the Central Act and its rules do not mandate the submission of the original C form, thus the state rules cannot impose such a requirement.

4. Validity of Duplicate C Forms for Tax Exemption:
The court concluded that submitting the duplicate C form is sufficient for claiming tax exemption. This conclusion was based on the reasoning that all parts of the C form (original, duplicate, counterfoil) are identical and serve the same purpose. The court referenced the Manganese Ore case, which supported the view that filing the duplicate part of the C form meets the compliance requirement under Section 8(4) of the Central Sales Tax Act.

5. Precedents and Judicial Interpretations Relevant to the Case:
The court examined the precedent set by the Manganese Ore case and the Supreme Court's decision in India Agencies (Regd.) v. Additional Commissioner of Commercial Taxes. The Supreme Court's decision emphasized strict compliance with the rules but did not overrule the Manganese Ore case. The court noted that the facts in the India Agencies case were different, as all original C forms were lost, whereas, in the current case, the original C forms were available with the department.

Judgment:
The court quashed the order dated January 2, 2008, which rejected the assessee's request to consider the duplicate C forms. The revisional authority was directed to verify the duplicate C forms against the originals filed in the manufacturing division. If the verification confirmed the authenticity, the trading division should be granted exemption for the remaining turnover of Rs. 27,48,403. The court also directed that any tax amount deposited by the assessee should be refunded if found entitled after verification. The writ petition was allowed without any order as to costs.

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