2019 (4) TMI 233 - HC - VAT and Sales Tax

Levy of higher tax - inter-State sales - C-Forms - composite sale transaction - deferred payment which was not included in the particulars of C-Form would not take the sale out of one under Section 8(1) of the Central Sales Tax Act, 1956 - Held that - Section 8(1) and 8(4) of the CST Act read with Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 makes it clear that concessional rate can be availed by the selling dealer only if the purchasing dealer furnishes a declaration duly filled and signed by him before the latter s Assessing Officer. C-Form is the necessary requirement for availing concessional rate; which, otherwise, would have to be levied under sub-section (2) of Section 8. As per sub-section (4) of Section 8, the declaration has to be duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form and furnished from a prescribed authority. The prescribed authority is the AO of the purchasing dealer. The prescribed form is C-Form as is available under the Rules of 1957. The prescribed particulars are also very clear from the C-Form as available in the Rules of 1957 itself, which is in triplicate and inter alia has to contain the particulars of bills or cash memo with the amount; being the sale consideration. Hence, only that portion of the bill amount as available in the C-Form could be levied with tax at the rates applicable under sub-section (1) of Section 8. The assessment years are 2005-06 and 2006-07 and after more than a decade, the assessee cannot be permitted to produce C-Forms which relates to long prior assessment years. The very submission of the assessee that if time is granted to produce C-Forms even now, indicates that there is no C-Form furnished by the purchasing dealer till now. Levy of higher tax under Section 8(2) of the CST Act is perfectly justified - decided in favor of the Revenue and against the assessee and reject the revisions.

Summary

Issues:
1. Interpretation of Section 8 of the Central Sales Tax Act, 1956 regarding the levy of higher tax on inter-State sales.
2. Consideration of deferred payment in C-Forms for inter-State sales transactions.

Issue 1: Interpretation of Section 8 of the Central Sales Tax Act:
The case involved a dispute regarding the assessment of higher tax on inter-State sales by the Assessing Officer (AO) under Section 8 of the Central Sales Tax Act, 1956 (CST Act). The appellant contended that the sales were made on the basis of provisional bills followed by final bills, with C-Forms furnished by the purchaser for the provisional bills. The AO refused to consider the deferred payment portion left out from the C-Form as an inter-State sale, leading to the levy of higher tax. The Tribunal upheld the decision. The appellant relied on precedents to argue that C-Forms can be produced at any stage during assessment proceedings. The appellant highlighted that the deferred payment constituted a negligible portion of the total turnover of inter-State sales. However, the Government Pleader emphasized strict compliance with statutory mandates, citing relevant Supreme Court judgments.

Issue 2: Consideration of Deferred Payment in C-Forms:
The appellant argued that the deferred payment, not included in the C-Form, should not affect the concessional rate applicable under Section 8(1) of the CST Act for inter-State sales. The appellant claimed that the sales were composite transactions, and the absence of deferred payment in the C-Form should not alter the nature of the sale. The Court analyzed the provisions of Section 8(1) and 8(4) of the CST Act along with Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957. It was clarified that the concessional rate could only be availed if the purchasing dealer furnished a declaration in the prescribed form. The Court emphasized that strict compliance with the prescribed particulars in the C-Form was necessary for availing the concessional rate. The Court rejected the appellant's argument that time should be granted to produce C-Forms, citing a previous decision prohibiting such actions. Ultimately, the Court ruled in favor of the Revenue, upholding the levy of higher tax under Section 8(2) of the CST Act due to the absence of C-Forms for the deferred payment.

In conclusion, the Court decided in favor of the Revenue, emphasizing the mandatory nature of the provisions under the CST Act and the necessity for strict compliance with the prescribed procedures for availing concessional rates on inter-State sales. The judgment highlighted the significance of furnishing complete and accurate C-Forms to determine the applicable tax rates and rejected the appellant's plea for producing C-Forms at a later stage.