9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 246 - HC - VAT and Sales TaxIssue of declaration form C under the Central Sales Tax Act, 1956 - withholding of issue of C form - liability of the respondent NEEPCO to issue the declaration form C to the petitioner for the supply made in execution of works contract allotted - Held that - A perusal of the provisions of the Arbitration and Conciliation Act, 1996 and of the above quoted section 2(3) makes it clear that all or certain disputes arising in respect of defined relationship, whether contractual or not, can be referred to arbitration subject, however, to sub-section (3) of section 2 which provides that Part I shall not affect any other law for the time being in force by virtue of which certain disputes may not be referred to arbitration. Disputes which are capable of reference to arbitration must necessarily arise between the parties in respect of a defined legal relationship, whether contractual or not . A claim reference whereof to arbitration is specifically barred by agreement between the parties or by any law for the time being in force, does not constitute dispute between the parties for reference thereof to arbitration and the Arbitral Tribunal shall have no jurisdiction in such matters. Question was not merely of performance and non-performance of contractual obligations affecting the civil/contractual rights of the parties but also of liability to pay tax which was statutory exaction and therefore, the writ court, cannot shut its eyes and refuse to interfere only on the ground that the question raised was only one of enforcement of contractual obligation particularly when the enforcement of contractual obligation involves rights and liabilities of the parties under statutory provisions. - In a sale of goods involve offer, acceptance and consideration. All these relates to goods which are the corpus and transfer of goods cannot be segregated from the total cause of action of the transaction of sale. The goods against which declaration form C is being sought by the petitioner, as per various apex court rulings, are deemed to have been transferred to the respondent-NEEPCO in the State of Arunachal Pradesh in execution of the works contract by the petitioner. Delivery of goods being an integral part of the cause of action, the cause of action can also be said to have arisen in the State of Arunachal Pradesh giving jurisdiction to this court to entertain the petition. Consideration of section 8 of the Central Sales Tax Act, 1956 as quoted above makes it abundantly clear that if, in the course of inter-State trade or commerce, any sale is effected by a registered dealer, of the goods described in sub-section (3) of section 8, the tax shall be only two per cent (with effect from June 1, 2008) of the turnover or such other rate as shall be applicable to the sale of such goods inside the appropriate State under the sales tax law of that State, whichever is lower. However, the Legislature intended the seller and the purchaser to furnish a declaration, and made a provision in sub-section (4) of section 8 requiring the registered dealer to whom the goods are sold, to file a declaration as prescribed by the Rules. Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, is the rule which prescribes the declaration forms stated in sub-section (4) of section 8. Rule 12 specifically lay down that the purchaser of the goods shall issue C form to the seller and that obligation is a statutory exaction of the Central Sales Tax Act, 1956, and the other specific provisions made in this behalf in regard to obtaining of the declaration form C, issue of duplicate in case of loss of such declaration and furnishing of indemnity bond, signing of the declaration and the right of the seller to demand a duplicate of the declaration form C in case of loss of the original. There is no scope of defeating the intention of the Legislature stated in its provision at the sweet will and pleasure of the purchaser of the goods. There is also no scope for denying the benefit available to a selling dealer as intended by the Legislature upon the refusal of the purchaser to issue C forms and it is made clear by providing under sub-rule (3) of rule 12 that in case the original form issued by the purchasing dealer is lost, the selling dealer can demand the purchasing dealer to issue a duplicate form. This necessarily implies that there exists an obligation to issue C forms by the purchasing dealer. Respondent-NEEPCO, through its correspondences to the petitioner, even prior to awarding the contract work, requested to avail of concessional rates of taxes, gave assurances to the petitioner time and again to issue C forms and even communicated to the Commissioner of Commercial Taxes, West Bengal in connection with issue of C form in order to avoid any disruption of the supply of the contract materials. In the aforesaid facts and circumstances, it cannot be allowed to deny the same and reject the claim of the petitioner on the pretext of absence of any provision in the contract agreement to issue C form. The impugned letter dated October 29, 2010 refusing to issue form C is impermissible and unacceptable under the provisions of law and the same is liable to be quashed and set aside. It is accordingly, quashed and set aside. - Decided in favour of assessee.
Issues Involved:
1. Liability of NEEPCO to issue declaration form C to the petitioner. 2. Whether the issue should be referred to arbitration as per the contract agreement. 3. Territorial jurisdiction of the court to entertain the petition. Detailed Analysis: 1. Liability of NEEPCO to issue declaration form C to the petitioner: The main question is whether NEEPCO is liable to issue the declaration form C for the supply made in execution of the works contract. The petitioner, a joint venture organization, was awarded a contract by NEEPCO for the Kameng Hydro Electrical Project and set up a factory in Howrah, West Bengal, to accelerate the work. The petitioner requested NEEPCO to issue C forms for supplies made from November 2008 to December 2008, which NEEPCO initially considered but ultimately refused, citing no provision in the contract agreement. The court held that NEEPCO is statutorily bound under the Central Sales Tax Act, 1956, to issue C forms to the petitioner. The Act and its rules create an obligation for the purchasing dealer to issue C forms to enable the selling dealer to avail of the concessional rate of tax. The court referred to the Andhra Pradesh High Court's judgment in Modern Proteins Ltd. v. Food Corporation of India, which established that even in the absence of an express contractual provision, there is an implied obligation to issue C forms in inter-State sales. The court quashed NEEPCO's refusal letter and directed it to issue the required C forms within one month. 2. Whether the issue should be referred to arbitration as per the contract agreement: NEEPCO raised a preliminary objection, arguing that the dispute should be referred to arbitration as per clause No. 70 of the contract agreement. The court, however, held that the matter pertains to a statutory obligation under the Central Sales Tax Act, which is not merely a contractual dispute but involves statutory exaction. Therefore, the arbitration clause does not bar the court from exercising its jurisdiction. The court cited the Jammu and Kashmir High Court's judgment in Subash Chander Gupta & Sons v. Union of India, which held that statutory liabilities under taxing statutes are not subject to arbitration. 3. Territorial jurisdiction of the court to entertain the petition: NEEPCO also challenged the maintainability of the petition on the grounds of territorial jurisdiction, arguing that the contract was executed in Shillong and the court at Shillong has jurisdiction. The court rejected this argument, stating that both the petitioner and NEEPCO are registered dealers in Arunachal Pradesh, where the project is located and the cause of action arose. The court referred to the Supreme Court's judgment in Navinchandra N. Majithia v. State of Maharashtra, which held that the cause of action arising wholly or in part within the territorial jurisdiction of a court gives that court the jurisdiction to entertain the petition. Conclusion: The court allowed the petition, quashed NEEPCO's refusal letter, and directed NEEPCO to issue the required C forms to the petitioner within one month. The court held that the matter involves statutory obligations under the Central Sales Tax Act, which are not subject to arbitration and fall within the court's jurisdiction.
|
