2017 (7) TMI 828 - HC - VAT and Sales Tax

Attachment of Bank Account - petitioner s case is that on account of the floods, the entire office premises was inundated and they could not filed objections to the notice dated 09.06.2016 - the petitioner would submit that so far as the inter-state sales not covered by the C Forms, the Assessing Officer has assessed the transaction at a higher rate of tax at 5% and in respect of the claim for exemption on stock transfer, the same has been disallowed for want of declaration Forms - Held that - it is seen that the major component of tax due is on account of the rejection of claim for exemption on stock transfer for want of declaration Forms - there is no material before this Court to show that as to what steps have been taken by the petitioner to secure the duplicate F Forms. However, considering the fact that the assessment was completed by an order dated 29.07.2016. The petitioner has produced substantial proof of Forms and the Assessing Officer also given due credit to the said Forms. Therefore, I am of the view that it is not a case of lack of bonafide but appears to be a genuine difficulty. For that reason, this Court is inclined to issue appropriate directions to be complied with by the petitioner and simultaneously safeguarding the interest of the Revenue - petition allowed.

Summary

Issues:
Challenge to assessment order under CST Act for the year 2014-15 and consequential bank account attachment for tax recovery.

Analysis:
The petitioner, a registered dealer under TNVAT Act and CST Act, challenged an assessment order under the CST Act for the year 2014-15 and a notice attaching the petitioner's bank account for tax recovery. The petitioner cited delays in responding to the notice due to office inundation from floods. The petitioner submitted C Forms and F Forms after delays caused by flood damage. The Assessing Officer assessed transactions at a higher tax rate for inter-state sales not covered by C Forms and disallowed exemption on stock transfer due to lack of declaration Forms. The petitioner requested time to obtain duplicate F Forms, citing a cumbersome procedure. The Government Advocate argued that despite sufficient time, the petitioner failed to produce all Forms. The Court noted the significant tax component due to the rejection of exemption on stock transfer. While acknowledging the petitioner's efforts in producing Forms, the Court directed the petitioner to pay outstanding taxes for specific transactions and submit proof of steps taken to obtain duplicate F Forms. If satisfactory proof is provided, the Assessing Officer must grant three months to produce the F Forms. Failure to comply within the specified period would allow the respondent to recover the outstanding tax amount. The Court ordered the lifting of the bank attachment upon compliance and required the petitioner to file a personal bond until the F Forms are produced.

This judgment addresses the challenges faced by a registered dealer in obtaining duplicate Forms after natural disasters, balancing the taxpayer's difficulties with the revenue's interests. It emphasizes the importance of timely compliance while providing a reasonable opportunity for the petitioner to rectify the deficiencies. The Court's directions aim to ensure tax compliance while safeguarding the petitioner's rights, highlighting the need for proper documentation and procedural adherence in tax assessments.