2015 (3) TMI 1005 - HC - VAT and Sales Tax

Request for a direction to the respondents to issue challan on the basis of declaration in Form-C to enable the petitioner to deposit the balance sale value to complete the transaction of sale and for further direction to accept the physical copy of declaration in Form-C for allowing the issuance of challan as inter state sale transaction and not as a local sale in Bihar in view of the nature of sale and for restraining the respondents from denying the issuance of challan on receipt of physical copy of declaration in Form-C. - Held that - It is evident from a consideration of the Rule 12 (1),(2), (6), (7) and (8) of the Central Sales Tax (Registration And Turnover) Rules, 1957 that the Rules themselves do not provide for uploading of the Form on TINXSYS or any other software system. They also provide for the issuance of manual Form Cs to the dealers. It is true that the TINXSYS software has been evolved as a national measure to verify the validity of the Form Cs that are being issued, as such forms when issued are uploaded by the Department of different States on TINXSYS software leading to instant verification of the same regarding valid issuance by different States. However, as informed by Commercial Taxes Department of U.P. that they have also been issuing Form-Cs manually which are not being uploaded on TINXSYS software. The Rules do not provide that all such forms have to be mandatorily uploaded on TINXSYS software. In such a situation, it is beyond the jurisdiction and power of the Secretary, Commercial Taxes Department, Bihar to issue such circular letter dated 5.12.2013 which is not in accord with the provisions of the Central Sales Tax (Regulation and Turnover) Rules, 1957. Circular Letter No. 4354 dated 5.12.2013 issued by the Commissioner-cum-Principal Secretary, Commercial Taxes Department, Bihar is quashed and the respondents are directed to accept blank Form-C issued to the petitioner by the authorities of Commercial Taxes Department of U.P. forthwith, subject of course to process of manual verification as was being followed earlier in case of such forms. The respondent Railway is directed to accept the blank Form-C issued to the petitioner and duly filled up subsequently without being uploaded on TINXSYS software and thereafter the respondent authorities of the Commercial Taxes Department shall accept such manually issued Form-C not uploaded on TINXSYS software but filled up in accordance with the Act and Rules. - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 regarding the issuance and submission of Form-C.
2. Validity of Circular Letter No. 4354 dated 5.12.2013 issued by the Commissioner-cum-Principal Secretary, Commercial Taxes Department, Bihar.
3. Authority of the Commissioner-cum-Principal Secretary to issue executive instructions contrary to the Rules.

Issue 1: Interpretation of Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957
The petitioner filed a writ petition seeking direction for the issuance of challan based on Form-C declaration to complete a sale transaction. The petitioner, a dealer of scrap in U.P., argued that the Circular Letter issued by Bihar authorities contradicted Rule 12 of the Central Sales Tax Rules. The Rules allow for manual issuance of Form-Cs, and the TINXSYS software is not mandated for all forms. The Court agreed with the petitioner's interpretation and quashed the Circular Letter, directing acceptance of manually issued Form-Cs from U.P.

Issue 2: Validity of Circular Letter No. 4354 dated 5.12.2013
The Circular Letter directed acceptance of Form-Cs uploaded on TINXSYS software, contrary to the Rules. The Court found that the Circular was beyond the Commissioner's jurisdiction as it did not align with the statutory provisions. As the Rules did not mandate uploading all forms on TINXSYS, the Circular was quashed. The Court ordered acceptance of manually issued Form-Cs subject to manual verification, as done previously.

Issue 3: Authority of the Commissioner-cum-Principal Secretary
The Court noted that the State failed to cite any provision authorizing the Commissioner to issue instructions conflicting with the Rules. As a result, the Circular Letter was deemed invalid. The Court directed the Railways to refund excess amounts collected from the petitioner and specified that the procedure for manually issued forms should revert to pre-TINXSYS software practices.

In conclusion, the High Court of Patna, in the judgment delivered by Justice Ramesh Kumar Datta, clarified the interpretation of Rule 12 of the Central Sales Tax Rules, quashed Circular Letter No. 4354, and emphasized adherence to statutory provisions over executive instructions. The judgment favored the petitioner's argument regarding the validity of Form-C issuance and directed the authorities to follow the established manual verification process for Form-Cs.