2018 (4) TMI 367 - HC - VAT and Sales Tax

Validity of Form I - case of Revenue is that Form I submitted by the respondent before the authorities was not in consonance with the provisions of sub-rule (11) of rule 12 of the rules read with sub-section (8) of section 8 of the Act, Form I has not been countersigned by the authority prescribed under the rules and therefore, is not valid - Held that - it appears that sub-rule (11) of rule 12 of the rules has been amended for the sake of convenience, and the requirement that the document (Form I) be countersigned by the authority specified by the Central Government authorizing the establishment of unit in the SEZ, has been done away with. Therefore, there is no longer any such requirement under the said sub-rule, nor can such requirement can be read into it. Sub-rule (11) of rule 12 of the rule after its amendment with effect from 7.6.2005, no longer refers to any specific authority as the issuing authority. The revisional authority was therefore, not justified in holding that the requirement of such rule 12(11) of the rules was not complied with and taxing the transaction and the Tribunal was wholly justified in setting aside the order passed by the revisional authority - petition dismissed - decided against Revenue.

Issues Involved:
1. Validity of Form 'I' under sub-rule (11) of rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957.
2. Justification of the Deputy Commissioner's demand of ?2,25,78,301/-.
3. Tribunal's order directing a refund of ?10,00,000/- deposited by the respondent.

Detailed Analysis:

1. Validity of Form 'I':
The primary issue revolves around whether Form 'I' submitted by the respondent met the requirements of sub-rule (11) of rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, read with section 8(8) of the Central Sales Tax Act, 1956.

- Petitioner's Argument: The petitioner contended that Form 'I' was invalid as it was not countersigned and certified by the authority specified by the Central Government authorizing the establishment of the unit in the SEZ. According to the petitioner, this countersignature was a mandatory requirement under sub-rule (11) of rule 12.

- Respondent's Argument: The respondent argued that the requirement for countersignature was eliminated by an amendment effective from 7.6.2005. The amended sub-rule (11) simply required the declaration to be in Form 'I', without the need for countersignature. The respondent supported this by referencing a communication from the Development Commissioner, RJIL SEZ, Jamnagar, which clarified that the issuance of Form 'I' was retained with the Commissioner of Sales Tax in Gujarat for proper monitoring.

- Court's Analysis: The court noted that sub-rule (11) of rule 12, prior to its amendment, required Form 'I' to be countersigned by the SEZ authority. However, post-amendment, this requirement was removed. The court found that the Form 'I' submitted by the respondent, issued by the Commercial Tax Officer, complied with the amended rules. The Tribunal's decision to accept the Form 'I' as valid was upheld, as it aligned with the amended sub-rule (11).

2. Justification of the Deputy Commissioner's Demand:
The Deputy Commissioner of Commercial Tax raised a demand of ?2,25,78,301/- by revising the original assessment order dated 7.8.2010.

- Petitioner's Argument: The petitioner argued that the demand was justified due to the invalidity of Form 'I'.

- Respondent's Argument: The respondent contended that the demand was unjustified as the Form 'I' submitted was valid under the amended rules.

- Court's Analysis: The court agreed with the Tribunal's finding that the Form 'I' was valid. Consequently, the revisional authority's demand based on the alleged invalidity of Form 'I' was unjustified. The Tribunal's decision to set aside the revisional authority's order was upheld.

3. Tribunal's Order Directing Refund:
The Tribunal directed the respondent to refund ?10,00,000/- deposited by it as a pre-deposit.

- Petitioner's Argument: The petitioner did not advance specific submissions against this order.

- Respondent's Argument: The respondent sought the refund of the pre-deposit following the Tribunal's favorable decision.

- Court's Analysis: The court did not find any reason to interfere with the Tribunal's order directing the refund, as the main issue regarding the validity of Form 'I' was resolved in favor of the respondent.

Conclusion:
The petition was dismissed, and the Tribunal's orders were upheld. The court ruled that the Form 'I' submitted by the respondent was valid under the amended sub-rule (11) of rule 12, and the Deputy Commissioner's demand was unjustified. The Tribunal's direction for a refund of ?10,00,000/- was also upheld. The interim relief granted earlier was vacated.

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