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2021 (7) TMI 26 - HC - VAT and Sales TaxInput tax rebate - rebate not allowed on the stock held by him on 01.04.2006 on the ground that Form-74 Stock Statement was not submitted on time - levy of double taxation during transition period - petitioner claims that return was not filed for transition period, as per the C.G. VAT Act, 2005 due to certain unavoidable reasons - HELD THAT - The assessment in this case was in respect of the period from 01.04.2006 to 31.03.2007. The C.G. Commercial Tax Act 1994 was being replaced by the Chhattisgarh VAT Act, 2005 and thereafter the Act, 2005 came into force on 01.06.2006. Section 72 of the Act, 2005 made the provision of repeal and savings - A reading of section 72 of the VAT Act of 2005 would show that The Chhattisgarh Commercial Tax Act, 1994 shall stand repealed provided certain acts done in the Act of 1994 would be saved meaning thereby the petitioner claimed that he had filed the return under the Act of 1994. Therefore, his right, privilege and obligation or the liability acquired under the Repeal Act would be saved under the provision of Clause (i) (b) of section 72 or not is required to be examined. It is not disputed that the earlier time period was further extended for another 60 days. Admittedly the petitioner had filed the stock statement on 07.11.2006 with a delay of 161 days. The petitioner claims that on the earlier Act of 1994, since the goods were purchased on which the tax were paid, he was entitled to get the benefit and the delay of filing being directory in nature cannot .be strictly interpreted. The Supreme Court in ALD AUTOMOTIVE PVT. LTD. VERSUS THE COMMERCIAL TAX OFFICER NOW UPGRADED AS THE ASSISTANT COMMISSIONER (CT) ORS. 2018 (10) TMI 814 - SUPREME COURT while dealing with the input tax credit held that the condition under which the concession and benefit is given is always to be strictly construed. It further held that in the event it is accepted that there is no time period for claiming input tax credit, the provision becomes too flexible and gives rise to large number of difficulties including difficulty in verification of claim of input credit. It also held that taxing statutes contain self-contained scheme of levy, computation and collection of tax. The time under which a return is to be filled for the purpose of assessment of the tax cannot be dependent on the will of a dealer. On reference of transitory provisions of section 73 sub-section (2) of the VAT Act, 2005 it mandates that where any goods specified in Schedule-II held in stock by registered dealer on the date of commencement of the Act, which have been purchased not earlier than 12 months from such date and are tax paid goods within the meaning of the Act repealed by the Act of 2005 and are for sale by him on or after the date within the State of Chhattisgarh or in the course of inter-State trade or commerce, he shall claim or to be allowed in respect of such goods within such period as may be prescribed an input tax rebate. Section 73(1) has used the word 'shall' with a further phrase within such period meaning thereby time limit has been fixed and Rule 80 of C.G. VAT Act 2006 also used the words in express language that the registered dealer shall furnish a statement in Form-74 in respect of goods, specified in Schedule II within a stipulated time. Therefore, the legislature has used the word 'shall' and hence it cannot be interpreted by the Court that it would be directory in nature - While the entire tax structure was being replaced by a new frame work, it was necessary for the Legislature to make a transitional provision. The transitional provision essentially preserves all taxes paid or suffered by the dealer earlier and credit thereof. Therefore, in order to put and end to finality of the claim while switching over from one tax regime to another, the time-frame prescribed by the legislature cannot be diluted by the Court order as it being the fiscal in nature and the circumstances of the nature has to be strictly complied. Petition dismissed.
Issues Involved:
1. Legality of the order dated 28.08.2010 passed by the Divisional Deputy Commissioner of Commercial Tax, Bilaspur. 2. Entitlement of the petitioner to input tax rebate on stock held as of 01.04.2006. 3. Interpretation of the time limit for filing Form-74 Stock Statement under the Chhattisgarh VAT Act, 2005. 4. Nature of the transitional provisions and their compliance under the Chhattisgarh VAT Act, 2005. Detailed Analysis: 1. Legality of the Order Dated 28.08.2010: The petitioner challenged the order dated 28.08.2010, which affirmed the order dated 11.08.2009 by the Commercial Tax Officer, Korba Circle. The primary contention was the non-allowance of input tax rebate due to the late submission of Form-74 Stock Statement. 2. Entitlement to Input Tax Rebate: The petitioner, a registered dealer engaged in the sale and purchase of mopeds and spare parts, argued that the input tax rebate should be allowed on the stock held on 01.04.2006. The petitioner contended that double taxation should not be imposed due to the late filing of returns, suggesting that only a meager penalty should be imposed as prescribed under the statute. 3. Interpretation of the Time Limit for Filing Form-74 Stock Statement: The petitioner argued that the time limit for filing Form-74 was directory and not mandatory, referencing the judgment in Siddharth Enterprises v. Nodal Officer (2019 SCC OnLine Gujarat 3711). Conversely, the State Counsel emphasized that the time limit was mandatory to ensure the finality of claims during the transition from the old statute to the new statute. The Supreme Court's stance in ALD AUTOMOTIVE PRIVATE LTD. Versus COMMERCIAL TAX OFFICER (2019) 13 SCC 225 was cited, highlighting that fiscal statutes must be strictly construed and that input tax credit is a concession/benefit that requires adherence to prescribed timelines. 4. Nature of Transitional Provisions and Compliance: Section 72 of the VAT Act, 2005, which deals with repeal and savings, and Section 73, which outlines the transitory provisions, were examined. Section 73 mandates that registered dealers must furnish particulars of stock held on the commencement date of the VAT Act in the prescribed form and within the prescribed period. Rule 80 of the Chhattisgarh VAT Rules, 2006, further specifies that Form-74 must be submitted within 31st May 2006, with an extension of 60 days. The petitioner filed the stock statement on 07.11.2006, resulting in a delay of 161 days. The court concluded that the use of the word "shall" in Section 73 and Rule 80 indicates a mandatory requirement, and the time limit cannot be interpreted as directory. Conclusion: The court held that the transitional provisions and the time limits prescribed under the VAT Act and Rules are mandatory and must be strictly complied with. The petitioner's delay in filing Form-74 could not be condoned, and the claim for input tax rebate was rightly denied. The writ petition was dismissed, affirming the legality of the order dated 28.08.2010.
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