2015 (9) TMI 415 - HC - VAT and Sales Tax

Fixation of floor rate for collection of advance tax Petitioner challenges Ext.P6 Circular, issued by commissioner, alleging that digitally signed Form 15 was not practical, to be followed in case of petitioners who are engaged in field of timber business It is also pointed out that, Commissioner adopted discriminative stand in so far as, some of dealers trading Cement and Rubber stand excluded from satisfying requirement under Ext.P6 Held that - Admitted position that Commissioner have power to issue Circular under different circumstances to meet requirements under statute, especially with regard to fixation of floor rate for collection of advance tax under Section 16(A) of Act Therefore while sustaining power and jurisdiction of Commissioner to have issued relevant Circular, Court directs Commissioner to consider grievance of petitioners as per relevant representations, especially with reference to non-availability of internet facility at relevant place and also as to transportation of goods through railway wagons Decided partially in favour of Petitioner.

Summary

Issues:
Challenge to Circulars insisting on digitally signed Form 15 declaration for transportation of goods; Discrimination in implementation; Jurisdiction of Commissioner to issue Circulars.

Analysis:
1. Challenge to Circulars: The writ petitions challenge Circulars requiring digitally signed Form 15 declarations for transporting goods. Petitioners, including individual dealers and traders associations, argue that the requirement is impractical, especially for timber business operators procuring goods from remote locations without internet access. They highlight discrimination, with some dealers exempted from the requirement, leading to grievances and representations submitted to the Commissioner.

2. Discrimination in Implementation: The petitioners in various writ petitions raise concerns about discrimination in the implementation of Circulars affecting timber merchants, rubber and latex traders, and other affected parties. They point out the exemption granted to certain industries while imposing burdensome requirements on others. Grievances are submitted, urging the Commissioner to address the discriminatory practices and provide relief to the affected parties.

3. Jurisdiction of Commissioner: The legal debate revolves around the jurisdiction of the Commissioner to issue Circulars mandating digital processes for tax compliance. The petitioners argue that the Commissioner's powers under Section 3 of the KVAT Act are limited to giving effect to statutory provisions. Reference is made to statutory provisions like Section 46(3) and Rule 58(16) regarding documentation requirements for valid transportation. The Special Government Pleader counters, citing Section 93A introduced in 2012, empowering electronic filing and payment, supporting the Commissioner's actions.

4. Court's Decision: The Court upholds the Commissioner's jurisdiction to issue Circulars, citing precedents where Circulars were deemed valid to meet statutory requirements. However, the Court directs the Commissioner to address the practical difficulties faced by petitioners, such as lack of internet access and transportation challenges. The Commissioner is instructed to consider the grievances, conduct hearings, and make appropriate decisions within six weeks, ensuring a fair resolution for the petitioners. The writ petitions are disposed of, requiring petitioners to submit the judgment to the competent authority for further action.