2017 (9) TMI 1359 - HC - VAT and Sales Tax

Penalty - petitioners seek a direction to the respondent to issue C declaration forms to them through on-line by unlocking the facility in the corresponding tax payer identification number and the general sales tax number - Held that - this Court upheld the power of the respondents to withhold the C Form declarations, as the respondents are statutorily empowered to do so - respondent are directed to release the C Form declarations, to which, the petitioners are eligible. Simultaneously, there will be a direction to the Puducherry Value Added Tax Act Appellate Tribunal, Puducherry to take up for hearing the stay petitions - petition allowed.

Summary

Issues:
Request for C declaration forms through online system, imposition of penalty under Section 24(3) of the Act, appeals before Appellate Assistant Commissioner, second appeals before Puducherry Value Added Tax Appellate Tribunal, withholding of C Form declarations by the respondent, legal position on withholding C Form declarations, directions to release C Form declarations, directions to Appellate Tribunal, power of respondents to withhold C Form declarations, possibility of stringent action for default in tax payment.

Analysis:
The petitioners, two different dealers registered under the Puducherry VAT Act and Sales Tax Act, sought a direction for the issuance of C declaration forms through an online system. They were assessed for various years and paid the tax immediately after revision notices were served. However, penalties were imposed under Section 24(3) of the Act, leading to appeals before the Appellate Assistant Commissioner, who upheld the penalties. Subsequently, second appeals were filed before the Puducherry Value Added Tax Appellate Tribunal, along with petitions for interim stay. The Tribunal, where the appeals are pending, did not pass separate orders on the stay petitions, prompting the petitioners to request the respondent to issue C Form declarations, which were not considered, leading to the petitions before the High Court.

The High Court noted a previous case where the power of the respondent to withhold C Form declarations was upheld. The Court emphasized that while the respondent had the statutory power to withhold C Form declarations, the justification for doing so in the present case needed examination. The Court highlighted the contradictory nature of the orders passed by the Appellate Assistant Commissioner and the need for the Appellate Tribunal to rectify the error. It was observed that the petitioner was not required to make a pre-deposit for penalties, and withholding C Form declarations was deemed harsh when the penalty amount was under dispute. The Court directed the release of C Form declarations and instructed the Appellate Tribunal to consider the stay petitions within three weeks.

In conclusion, the High Court disposed of the writ petitions by directing the release of C Form declarations to the petitioners and instructing the Appellate Tribunal to address the stay petitions promptly. The Court reiterated the statutory power of the respondents to withhold C Form declarations but clarified that the present order should not set a precedent. Stringent action against the petitioners was warned in case of default in tax payment, emphasizing compliance with tax obligations to avoid such consequences.