2023 (9) TMI 862 - HC - VAT and Sales Tax

Cancellation of C-Forms issued with retrospective effect or not - requirement of assessment u/s under Section 17 of the HVAT Act - HELD THAT - The question whether C-Forms issued by the authorities can be cancelled retrospectively is no longer res integra. The same is covered by various decisions including the decisions of this Court in JAIN MANUFACTURING (INDIA) PVT. LTD. VERSUS THE COMMISSIONER VALUE ADDED TAX ANR. 2016 (6) TMI 304 - DELHI HIGH COURT where it was held that the order passed by the DT T cancelling the C Form issued to the Petitioner in the present case with effect from 27th November 2015 is hereby set aside. The Petitioner will continue to treat the said C-Form issued to it as having been validly issued. The DT T shall, not later than ten days from today, make the necessary corrections on its website to indicate the validation of the above C-Form. The respondents concurs that the question raised by the petitioner is covered by the aforesaid decision. The present petition is allowed and the C-Forms issued by the Sales Tax Department to the purchasing dealer (Ghanshyam Industries, TIN No. 07106917681) cannot be cancelled. The concerned authorities shall act accordingly.

Summary

Issues Involved:
The issues involved in the judgment are the validity of C Forms issued under the Central Sales Tax (Registration & Turnover) Rules, 1957, and the retrospective cancellation of C-Forms by the VAT Authorities.

Validity of C Forms:
The petitioner, a registered dealer under the Central Sales Tax Act and the Haryana Value Added Tax Act, engaged in the business of selling lubricants, tyres, and auto parts, sold goods to registered dealers across the country, including dealers in Delhi, against declarations in Form-C. The petitioner received a notice from the VAT Authorities in Haryana, stating that C-Forms for sales made to certain dealers, including one in Delhi, had been cancelled, necessitating reassessment under the HVAT Act. The petitioner contested the retrospective cancellation of C-Forms, which had been used to charge central sales tax at a concessional rate. The Court noted that the issue of retrospective cancellation of C-Forms had been addressed in previous decisions, including Jain Manufacturing (India) Pvt. Ltd. v. The Commissioner Value Added Tax & Anr. and Zapsell Retail v. Commissioner, State Goods & Services Tax Delhi & Anr. The respondents accepted that the question raised by the petitioner was covered by these decisions. Consequently, the Court allowed the petition, ruling that the C-Forms issued to the purchasing dealer could not be cancelled retrospectively. However, the authorities were not precluded from taking action against the purchasing dealer if any statutory violation was found, in compliance with the law.

Retrospective Cancellation of C-Forms:
The petitioner challenged the retrospective cancellation of C-Forms issued by the Sales Tax Department to a purchasing dealer, arguing that the cancellation affected the sales made based on those forms and the central sales tax charged at a concessional rate. The Court referred to previous decisions to establish that the issue of retrospective cancellation of C-Forms had been addressed in the past. The respondents agreed that the matter raised by the petitioner had already been settled in those decisions. Consequently, the Court allowed the petition, ruling that the C-Forms issued to the purchasing dealer could not be cancelled retrospectively. However, the authorities were reminded that they could still take action against the dealer if any statutory violation was discovered, as long as it was done in accordance with the law.