2025 (4) TMI 951 - HC - VAT / Sales Tax

Levy of penalty u/s 10-A of the CST Act - inter-State purchase of Xray Xan 250 hp CPU which commodity was not permitted to purchase or sales against Form C under the Central Sales Tax Act 1956 - HELD THAT - Under the C Form issued certain declarations have to be made. On asking counsel to produce copies of the C Forms the same were not available. Counsel stated that his instructions are the C Forms have been given to the dealer who sold the goods and hence petitioner does not have copies of the C Forms. In the matter at hand the Tribunal has only remanded the matter for fresh consideration. The grievance of petitioner is that the remand is for limited purpose to ascertain what is the actual tax paid in the other State and that may be taken into account to ascertain the balance of penalty of 150%. Counsel stated that no penalty is in fact payable. The fact that the C Form itself is not made available to this court for verification makes to draw adverse inference. Therefore the appeal is dismissed.

Summary

The Madras High Court dismissed the tax case revision challenging the Tamil Nadu Sales Tax Appellate Tribunal's order dated 5th November 2024, which remanded the matter to the Assessing Officer. The case involved the petitioner's inter-State purchase of goods (Xray, Xan 250, hp CPU) not permitted for purchase or sale against Form 'C' under the Central Sales Tax Act, 1956 (CST Act). The petitioner issued Form 'C' to the other State dealer but lacked the required 'B' certificate permission, resulting in a penalty under Section 10-A of the CST Act-initially 150% of tax due (Rs. 5,65,500), later reduced to 25% by the Appellate Deputy Commissioner.The Tribunal found the issue required reconsideration, noting the petitioner's claim that the machinery was for hallmarking and assaying gold jewellery integral to their business, while the State contended such purchases were not reflected in the Certificate of Registration, thus attracting penalty under Section 10A. Crucially, the petitioner failed to produce copies of the 'C' Forms for verification, leading the Court to "draw adverse inference." The Court held that if the petitioner produces the 'C' Forms and other evidence before the Assessing Officer, they may be considered "in accordance with law." The appeal was dismissed with no order as to costs.