2019 (7) TMI 648 - HC - VAT and Sales Tax

Retrospectively declaration of C-Form as obsolete - Validity of Notification dated 11th July, 2018 issued by the Commissioner of Value Added Tax (CVAT) under Rule 5 (13) of the Central Sales Tax Act (Delhi) Rules, 2005 - C Form issued by M/s. Sarv Manglam Sales in favour of the present petitioner is declared obsolete with effect from the date of issuance of such forms - HELD THAT - Once the form that has been issued is utilized, the question of subsequently declaring such used forms as obsolete would not arise. Rule 5(14) makes the requirement of surrender of the unused forms of the series design or colour that have been rendered obsolete clear and provides that only for such unused forms would new forms be issued. It is, therefore, plain that the above rules do not permit the CVAT to declare forms that have already been issued and acted upon as obsolete. The present petition should succeed since here there is no legal basis for the Respondents to have declared by the impugned notification, the C Forms already issued and acted upon as obsolete . The impugned notification dated 11th July 2018 issued by the CVAT is hereby set aside - Petition allowed.

Summary

Issues:
Challenge to notification declaring 'C' Form obsolete under CST Delhi Rules.

Analysis:
The writ petition sought to quash a notification declaring a 'C' Form issued by a dealer as obsolete and invalid under Rule 5(13) of the CST Delhi Rules. The 'C' Form was issued for an inter-State sale of goods to a dealer in Delhi against a prescribed form for a 2% tax rate. The dealer presented the form in Jammu and Kashmir for tax payment, which was accepted. The key question was whether the retrospective declaration of the form as obsolete was justified.

The Court examined Rule 5(13) and 5(14) of the CST Delhi Rules, emphasizing that once a form is utilized, declaring it obsolete would not apply. Rule 5(14) mandated surrender of unused forms upon declaration of obsolescence for new forms issuance. The Court concluded that the rules did not allow for forms already issued and acted upon to be declared obsolete, thereby invalidating the notification retrospectively declaring the 'C' Form as such.

In response to the Respondent's argument citing previous judgments, the Court noted that the present petition should succeed independently of those judgments. It highlighted that the impugned notification lacked a legal basis to declare the 'C' Forms already issued and acted upon as obsolete. Notably, the Commissioner did not invoke Rule 5(13) in the previous cases cited by the Respondent. Consequently, the Court set aside the notification dated 11th July 2018 issued by the CVAT, allowing the writ petition in favor of the petitioner.