2019 (7) TMI 1456 - HC - VAT and Sales Tax

Recall of initially issued C-Forms - petitioners submits that, once a C-Form is issued, the same cannot be recalled - HELD THAT - Nothing is placed on record to suggest that, once a C-Form is issued cannot be revoked. In the event, the C-Forms are obtained by practicing fraud, surely, the authorities upon discovery of such fraud, are entitled to say so and have such C-Forms recalled. It is for the person affected by such decision to satisfy the authorities that, there was no fraud involved. In the present case, the authorities found the C-Forms to be issued in favour of shell companies and have, therefore, taken such steps with the provisions for the petitioners to explain their stand - The petitioners had replied to the show-cause notices. A final decision has since been taken - there are no reason to interfere with such final decision. Petition dismissed.

Summary

Issues:
Two writ petitions involving the recall of C-Forms initially issued to petitioners on the grounds of alleged fraudulent activities by the authorities.

Analysis:
The judgment by the High Court of Calcutta, delivered by Justice Debangsu Basak, pertains to two writ petitions that were taken up for analogous hearing due to their similarity in issues. In both cases, the petitioners were initially provided with C-Forms, which were later recalled by the authorities. The petitioners were then served show-cause notices to explain why the C-Forms should not be revoked. The petitioners argued that once a C-Form is issued, it cannot be recalled, suggesting that any discrepancies should be addressed during assessment proceedings.

The Additional Advocate General representing the respondents contended that upon investigation, the petitioners were found to be associated with shell companies, with one petitioner even claiming to be a security guard. The authorities, upon discovering potential fraudulent activities in obtaining the C-Forms, decided to recall them. The petitioners were given an opportunity to present their case through the show-cause notices. The court noted that there was no evidence to suggest that a C-Form, if obtained through fraud, cannot be revoked. It emphasized that authorities have the right to recall such forms if fraud is detected, and it is the responsibility of the affected parties to prove otherwise. In this case, as the C-Forms were linked to shell companies, the authorities were justified in taking action and providing the petitioners with an opportunity to clarify their position.

The petitioners responded to the show-cause notices, and a final decision was subsequently made. Justice Debangsu Basak found no grounds to interfere with the final decision reached by the authorities. Consequently, both writ petitions, numbered W.P. No.10510 (W) of 2016 and W.P. No.9324 (W) of 2016, were dismissed by the court, with no costs imposed on either party. The judgment concluded by stating that urgent certified website copies of the order would be provided to the concerned parties upon fulfilling the necessary formalities.