2015 (12) TMI 785 - HC - VAT and Sales Tax

Disallowance of exemption on second interstate Sales - Discrepancy - Held that - Petitioner filed a second appeal before the Tamil Nadu Sales Tax Appellate Tribunal. At the time of filing of the second appeal, the entire disputed tax had been paid by the petitioner. During the pendency of the second appeal, the petitioner obtained Form-C declarations for the balance turnover and offered to produce the same. However, the counsel for the petitioner failed to appear before the Tribunal resulting in the appeal being dismissed for non prosecution. The restoration application was also rejected. However, those orders of the Tribunal were set aside by this Court in a writ petition and the matter remitted back. Petitioner could have filed an application for rectification along with necessary forms would not preclude the assessee from producing them either before the first Appellate Authority or before the second Appellate Authority, provided the forms of declaration are genuine. Therefore, the Tribunal was not right in non suiting the petitioner on the short ground that they ought to have produced the forms before the Assessing Officer within five years, as per the circular of the Commissioner. - requirement under the statutory prescription is that an assessee should file E1 and C declaration forms. This has been done admittedly by the revision petitioner. Therefore, an obligation, which is not cast upon the assessee under the statutory prescription contained in Section 6(2) of the CST Act, 1956 cannot be imposed upon the revision petitioner by the Tribunal - Decided in favour of assessee.

Summary

Issues:
Assessment of higher tax rate on interstate sales due to discrepancies in Form C declaration and E1 statement, disallowance of exemption on second interstate sales, acceptance of C declaration forms, confirmation of additional sales tax on turnover not covered by C declaration forms.

Analysis:
1. The petitioner, a registered dealer under the TNGST Act and CST Act, faced a dispute regarding the assessment of higher tax rate on interstate sales due to discrepancies in Form C declaration and E1 statement. The Assessing Officer levied a higher tax rate on the turnover for which the petitioner couldn't furnish Form C declaration, leading to disallowance of exemption on second interstate sales. The first Appellate Authority partly allowed the claim and remanded the matter to the Original Authority.

2. The petitioner then filed a second appeal before the Tamil Nadu Sales Tax Appellate Tribunal. Despite paying the disputed tax and obtaining Form-C declarations for the balance turnover during the appeal, the petitioner's counsel failed to appear before the Tribunal, resulting in dismissal for non-prosecution. However, the Tribunal's orders were set aside by the High Court in a writ petition, and the matter was remitted back to the Tribunal for reconsideration.

3. The Tribunal dismissed the appeal based on the petitioner's failure to file C Form declaration within the specified time frame and provide detailed statements regarding transit sales. However, the High Court, referring to a previous Full Bench decision, held that an appeal is a continuation of assessment proceedings, allowing the petitioner to produce necessary forms before the Appellate Authorities, provided they are genuine. The Court ruled in favor of the petitioner on the acceptance of C declaration forms and the imposition of additional sales tax not covered by C declaration forms.

4. Consequently, the High Court allowed the revision, permitting the petitioner to file the declaration forms before the Assessing Officer for verification of genuineness, and directed the Assessing Officer to pass a revised order accordingly. The judgment clarified the obligations of the assessee under the statutory prescription of the CST Act, ensuring a fair resolution of the tax assessment dispute.