2023 (5) TMI 887 - HC - VAT and Sales Tax

Levy of tax - Direct Export Sales - Sales in the Course of Export - exempted under Section 5(1) and Section 5(3) respectively of the CST Act, 1956 - levy of tax on the only ground that the H forms and other related evidences were filed after passing of the Assessment Order as being contrary to the proviso to Rule 12(7) r/w Rule 12(10) of the CST (R T) Rules, 1957. Whether there are merits to consider the Writ Petition or not? - HELD THAT - Admittedly the petitioner has not furnished Forms H and other connected evidence showing that he made Export Sales and Sales in the Course of Export before the assessment order was passed by the 2nd respondent. His submission is that due to the prevalence of Covid- 19 pandemic situations wherein a general ban was imposed by the Central and State Governments restricting the movements of the public, he could not submit the Forms before the 2nd respondent - In this context a perusal of the copy of original Assessment order filed along with the material papers shows, the impugned order was passed by 2nd respondent on 3.11.2020, It is an admitted fact that since March, 2020, the Covid-19 pandemic was in force and thereby the Central and State Governments restricted the movements of the general public. Learned Government Pleader has not disputed this fact and hence we can take Judicial notice of the same. There are substance in the submission of learned counsel for petitioner that due to the prevalence of the Covid- 19 pandemic, he could not file Forms H and other relevant material to establish that in deed he made exports sales. In Raj Trading Company Vs. State of Punjab 2 2013 (9) TMI 980 - PUNJAB AND HARYANA HIGH COURT in similar circumstances, the High Court of Punjab also having observed that the petitioner therein was in possession of H Form by the date of original assessment order and appellate order showing prima facie that the goods were exported out of the country, directed the appellate authority for adjudication of the matter afresh with respect to the forms H and C relied upon by the appellant. The Revised Assessment Order dated 09.03.2023 passed by the 1st respondent is set aside to the extent of the said authority refusing to accept the Forms H and other relevant material produced under section 5(1) and 5 (3) of CGST Act with a direction to consider those materials produced by the petitioner and afford an opportunity of hearing to the petitioner to establish the genuinety of those documents and after affording an opportunity of hearing to both parties, pass an appropriate order on merits afresh expeditiously. Petition allowed.

Summary

Issues involved:
The challenge to the Revised Assessment Order under the Central Sales Tax Act, 1956 regarding the levying of tax on Direct Export Sales and Sales in the Course of Export due to late submission of 'H' Forms and related evidence.

Issue 1: Late submission of 'H' Forms and evidence

The petitioner, a Registered Dealer under the APVAT Act and the Central Sales Tax Act, was assessed for tax on Direct Export Sales and Sales in the Course of Export, despite exemptions under Sections 5(1) and 5(3) of the CST Act, due to failure to submit 'H' Forms and other evidence. The petitioner cited the Covid-19 pandemic as the reason for the delayed submission of these forms, which were eventually submitted after the assessment order was passed. The petitioner sought a Revised Assessment Order granting exemption based on the belated submission of forms.

Issue 2: Legal arguments and counterarguments

The petitioner argued that there was no legal impediment to accepting the 'H' Forms after the assessment was made, especially considering the exceptional circumstances of the Covid-19 pandemic. Citing precedents where courts directed authorities to consider late-submitted forms and evidence, the petitioner sought a reconsideration of the assessment order. In contrast, the Government Pleader contended that Rule 12(10) of the CST Rules mandated the submission of 'H' Forms before assessment, and therefore, the refusal to accept the forms was justified.

Judgment:

The High Court acknowledged the impact of the Covid-19 pandemic on the petitioner's ability to timely submit 'H' Forms and related evidence. Referring to previous judgments where courts directed authorities to consider late-submitted forms, the Court allowed the Writ Petition and set aside the Revised Assessment Order. The Court directed the assessing authority to reconsider the materials produced by the petitioner, provide an opportunity for both parties to present their case, and pass a fresh order on merits promptly. The decision was based on the exceptional circumstances and the need for a fair assessment process.