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2019 (4) TMI 319 - HC - VAT and Sales TaxLevy of CST - Cancellation of F-Forms - CST levied treating the transaction of stock transfer as an the inter-state section under the deeming section of Section 6A of CST Act - vires of Rule 8 (10) of the CST rules - Held that - The Court is satisfied that the Petitioner has made out a prima facie case for grant if an ad interim order in its favour. It is accordingly directed that till the next date of hearing, the impugned notification dated 18th June, 2018 issued by the Respondent No.2 shall remain stayed. List on 5th August, 2019.
Issues:
1. Validity of the cancellation of Form F by the VAT Commissioner in Delhi. 2. Interpretation of Rule 8 (10) of the CST Delhi Rules. 3. Challenge to the ultra vires nature of Rule 8 (10) of the CST Delhi Rules. 4. Comparison of the present case with previous judgments. 5. Granting of an ad interim order in favor of the Petitioner. Issue 1: Validity of Form F Cancellation The Petitioner, a registered dealer in Uttarakhand, supplied edible oil to a Delhi-based company on a stock transfer basis. The Delhi VAT Authorities issued Form F for these transactions. However, the VAT Commissioner in Delhi canceled the Form F, leading to concerns about potential CST liabilities. The Petitioner argued that the cancellation was unjustified as the forms were valid and verified before submission to the Assessing Authority. Issue 2: Interpretation of Rule 8 (10) of CST Delhi Rules The Petitioner's counsel contended that Rule 8 (10) of the CST Delhi Rules aimed to eliminate unused manual forms, not cancel issued forms. They argued that the power to declare forms obsolete only applied to unused forms of specific series, color, and design. Furthermore, the counsel highlighted that Rule 8A made manual form issuance redundant, emphasizing the electronic generation of forms through the DTT website. Issue 3: Challenge to Ultra Vires Nature of Rule 8 (10) The Petitioner challenged the validity of Rule 8 (10) of the CST Delhi Rules, asserting that the VAT Commissioner exceeded their rule-making power under Section 13 (4) (e) of the CST Act. They argued that the rule was misapplied to cancel already issued Form F, which was not within the intended scope of the rule. Issue 4: Comparison with Previous Judgments The Respondent referred to a previous court order and a related case to support their argument. However, upon examination, the court found that the cited case did not align with the present circumstances. The court differentiated the current case from the previous judgments, indicating that the Petitioner's situation warranted separate consideration. Issue 5: Granting of Ad Interim Order After evaluating the arguments, the court acknowledged the Petitioner's prima facie case for relief. Consequently, the court issued an ad interim order staying the impugned notification dated 18th June, 2018, until the next hearing scheduled for 5th August 2019. This temporary relief was granted in favor of the Petitioner pending further proceedings.
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