2022 (3) TMI 584 - HC - VAT and Sales Tax

Seeking waiver of amount payable towards non submission of 'C' forms - HELD THAT - In the instant case, the first appellant is yet to concur with the concessions sought for by the respondent. Further, the recommendation made by the 2nd appellant to the 1st appellant does not include the concession for non-payment of the applicable tax with regard to the non filing of Form 'C'. It is further contended that the claim of the Department is not regarding any concession granted under clause 10 (B) 8 of the BIFR Scheme, but regarding full tax applicable towards non-filing of 'C' Form. The provision under clause 10 (B) 10 of the BIFR Scheme grants concession only with regard to condoning the delay in payment of tax for non-filing of 'C' Form and not dispensing with the tax liability itself and that the exemption as contemplated in clause 10 (B) 10 is related to interest for delayed payment of difference tax rate and not the tax component itself - The respondent ought to have filed the declaration in Form C, to avail the concessional rate, unless that was done, the benefit of the concessional rate, as claimed by the dealer, cannot be given. The amount of ₹ 80.42 lakhs is due based on the assessment made for non-production of C forms and the respondent is under an obligation to pay such amount but without considering the same, the learned Judge has issued positive direction in line with the claim of the respondent. Hence, the learned Government Advocate prayed to set aside the order of the learned Judge and to direct the respondent to pay the sum of ₹ 80.42 lakhs along with interest at 2% due thereon till the date of payment. There is no reason for entertaining this writ appeal, since there is no positive direction issued by the learned Judge in the order, which is impugned herein - the learned Judge only directed the appellants to consider the waiver application with regard to levy of penalty and interest etc., and such a direction issued needs no interference by this Court - petition disposed off.

Summary

Issues Involved:
1. Representation for waiver of tax dues for non-submission of 'C' forms.
2. Compliance with BIFR scheme and tax liabilities.
3. Interpretation of provisions under the CST Act and BIFR scheme.

Analysis:

Issue 1: Representation for waiver of tax dues for non-submission of 'C' forms
The appeal arises from a writ petition where the respondent sought a waiver of ?80,42,027 payable for non-submission of 'C' forms. The court granted liberty to make a representation to the Commercial Tax Department for waiver consideration, in line with the BIFR's directions. The appellant challenged this order, arguing that the respondent failed to comply with CST Act provisions requiring 'C' form declarations for concessional tax rates. The court upheld the direction for waiver consideration, emphasizing that any adverse decision by the department could be challenged legally.

Issue 2: Compliance with BIFR scheme and tax liabilities
The respondent, a registered dealer in sanitary wares, faced tax dues totaling ?5.49 crores for several assessment years. The BIFR sanctioned a rehabilitation scheme, including a deferral scheme, for which the respondent availed benefits but failed to meet payment schedules, incurring interest liabilities. The appellant contended that the respondent's non-compliance with payment terms warranted full tax payment, not just interest waivers. The court noted the BIFR's specific directions on payments and upheld the representation for waiver consideration regarding the 'C' form non-submission dues.

Issue 3: Interpretation of provisions under the CST Act and BIFR scheme
The appellant argued that the respondent's failure to produce 'C' forms led to the ?80.42 lakhs assessment, emphasizing the importance of compliance with CST Act requirements for concessional tax rates. The court clarified that the BIFR scheme provided concessions for delayed tax payments, not absolving tax liabilities. It highlighted the distinction between interest waivers and tax liabilities, underscoring the respondent's obligation to pay the assessed amount. The court's decision focused on the representation's consideration for waiver, leaving room for legal challenge in case of adverse outcomes.

In conclusion, the court upheld the direction for waiver consideration, emphasizing the importance of compliance with statutory provisions while acknowledging the BIFR's scheme concessions for rehabilitation. The judgment underscores the need for adherence to tax laws and the right to challenge adverse decisions through legal means.