2015 (3) TMI 915 - HC - VAT and Sales Tax

Belated filing of return - tribunal found that the return was filed belatedly and as an after-thought - The Entry was further amended in the year 1997. The annual return was filed on 2nd July, 1998 showing tax liability as per the provisions of Entry J-8. Therefore, the claim of the dealer was that benefit of this Entry be granted to him and the matter be remanded back to the Assessing Authority to work out the tax liability in accordance with the provisions of Entry J-8. - Held that - A perusal of section 46B would indicate as to how a registered dealer has not been allowed deduction under sub-section (1) of section 8 from the turnover of sales of goods because of section 12A(3) or, as the case may be, sub-section (3)(a), then, in respect of such sales he may deduct from the sale price before reducing it in accordance with Rule 46A the purchase price of such goods. Therefore, there are stipulations in the rule itself and if the dealer in this case who was registered has dealt with another registered dealer, then, with a view to enable him to obtain these reductions that the provisions have been inserted. To give effect to the rule itself and completely that one finds that the Entry has been inserted. If that Entry has come into force as in the case of the present dealer at a later date, but is given effect to from the prior date, then, compliances with certain conditions can be made later on. How in several orders of the Tribunal itself, this condition is considered and held to be capable of substantial compliance. In the present case on the admitted facts, the Tribunal found that the condition is capable of substantial compliance. The later observations of the Tribunal with regard to the alleged delay need not detain us. If the provisions are read in their proper perspective and in the above background, then, the conditions in this Entry and particularly condition No. VI can be held to be capable of substantial compliance. If that is how the Tribunal as also we conclude, then the question of law referred for the opinion of this Court will have to be answered in favour of the dealer and against the Revenue. - Decided in favour of assessee.

Issues Involved:
1. Justification of denying the benefit of Entry J-8 due to non-compliance with the condition of filing returns.
2. Interpretation of whether the condition of filing returns under Entry J-8 is mandatory or directory.
3. Impact of late filing of revised returns on the benefit of Entry J-8.
4. Tribunal's obligation to refer to previous judgments and statutory provisions.

Detailed Analysis:

1. Justification of Denying the Benefit of Entry J-8:
The core issue revolves around whether the Tribunal was justified in denying the benefit of Entry J-8 to the appellant for the assessment period 1995-96 due to non-compliance with the condition of filing returns. The Tribunal had initially denied this benefit on the grounds that the appellant did not comply with the filing requirements as stipulated under Entry J-8, which was introduced on 6th March 1996 with retrospective effect. The appellant, an importer and re-seller of various goods, was assessed under the Bombay Sales Tax Act, 1959, resulting in a demand of Rs. 3,25,547/-. The appellant's appeals were partially allowed, but the Tribunal upheld the denial of Entry J-8 benefits, leading to the present reference.

2. Interpretation of Filing Returns Condition:
The Tribunal's interpretation of the condition of filing returns under Entry J-8 is critical. The appellant argued that the requirement was capable of substantial compliance rather than strict compliance, suggesting it was directory and not mandatory. Conversely, the respondent contended that the condition was mandatory and required strict compliance, rejecting the doctrine of substantial compliance. The Tribunal's earlier decisions on similar issues were cited, indicating a precedent for considering the condition as directory, yet the Tribunal referred the question to the High Court, which was deemed erroneous by the appellant.

3. Impact of Late Filing of Revised Returns:
The appellant had filed usual monthly returns and later filed an annual return showing tax liability as per Entry J-8. However, the revised annual returns were filed belatedly, just before the conclusion of the assessment. The Revenue argued that the appellant failed to file monthly returns immediately after the incorporation of Entry J-8, thus not complying with the main condition. The appellant relied on several Tribunal judgments and a clarification from the Senior Assistant Commissioner of Sales Tax, arguing that the delay should not negate the compliance with Entry J-8 conditions. The Tribunal's conclusion was that late filing did not necessarily bar the appellant from the benefit of Entry J-8, indicating the condition could be substantially complied with.

4. Tribunal's Obligation to Refer to Previous Judgments and Statutory Provisions:
The Tribunal was criticized for not adequately referring to previous judgments and statutory provisions while deciding the matter. The Tribunal had acknowledged that filing monthly returns was not a condition precedent for the benefit of Entry J-8 and that late filing did not affect the claim. The Tribunal should have considered its own orders and relevant statutory provisions, such as Rule 46B, which deals with the reduction of sales price for levy of sales tax. The Tribunal's failure to do so led to the unnecessary referral of the question to the High Court.

Conclusion:
The High Court concluded that the condition of filing returns under Entry J-8 is capable of substantial compliance. The Tribunal's decision to refer the question to the High Court was unnecessary, as the issue could have been resolved based on existing Tribunal orders and statutory provisions. The question of law was answered in favor of the appellant, emphasizing that the condition could be substantially complied with, and the Tribunal should have addressed the matter on merits without referring it to the High Court. The High Court also expressed concern over the unnecessary burden on judicial resources due to such referrals.

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