2019 (7) TMI 649 - HC - VAT and Sales Tax

Retrospectively declaration of C-Form as obsolete - validity of Notification dated 18 June, 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 to Gentex International 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 impugned notification 18th June, 2018 issued by the CVAT is hereby quashed - Petition allowed.

Summary

Issues:
1. Validity of a notification declaring a 'C' Form obsolete and invalid.
2. Interpretation of Rule 5(13) and Rule 5(14) of the CST Delhi Rules.
3. Authority to retrospectively declare a form as obsolete.
4. Impact of a verification letter on the validity of the notification.

Analysis:
The judgment revolves around a notification issued by the Commissioner of Value Added Tax (CVAT) declaring a 'C' Form obsolete and invalid, specifically affecting a transaction between two registered dealers under the CST Act. The petitioner sought to quash this notification, arguing that the form had already been acted upon by the Jammu and Kashmir authority. The Court delved into the interpretation of Rule 5(13) and Rule 5(14) of the CST Delhi Rules. Rule 5(13) empowers the Commissioner to declare certain forms obsolete, but Rule 5(14) specifies the surrender of unused forms upon such declaration, indicating that used forms cannot be retrospectively deemed obsolete.

The Court highlighted that once a form has been utilized in a transaction and accepted by the relevant authority, it cannot be declared obsolete subsequently. The rules mandate the surrender of only unused forms upon declaration of obsolescence. The judgment emphasized that the CVAT lacked the authority to render forms obsolete once they had been issued and acted upon. The Court also considered a verification letter from the Assistant Vat Tax Officer, affirming the validity of the 'C' Form in question, further supporting the petitioner's case.

In light of the above analysis, the Court quashed the impugned notification dated 18th June, 2018, issued by the CVAT, thereby allowing the writ petition in favor of the petitioner. The judgment serves as a significant clarification on the limitations of retrospective declarations of form obsolescence and upholds the principle that once a form has been utilized in a transaction and accepted by the relevant authority, it cannot be invalidated through subsequent notifications.