2019 (2) TMI 927 - HC - VAT and Sales Tax

Issuance of outstanding C-Form declarations - CST Act, 1956 - inter-State purchases - benefit of concessional rate of tax on inter-State sales - Held that - In the details required to be stated by the dealer, it is required to state the registration certificate number which covers the purchase of such goods. Therefore, for the purpose of filling a declaration in Form-C, the person concerned is required to have a registration certificate at the time of purchase of goods. Sub-section (4) of section 8 of the Act provides that the provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. In the present case, the petitioner being a registered dealer is required to supply C-Form to the selling dealer. Therefore, the petitioner seeks issuance of Form-C in respect of the purchases made during the period when the first petitioner had a registration certificate, that is, prior to 1.9.2016. In the opinion of this court, if the first petitioner meets with the requirements of section 8 read with rule 12 of the rules, it is entitled to be issued Form-C in respect of the inter- State purchases made by it. Besides, Form-C is issued under the Central Sales Tax Act and in the absence of any dues under that Act being outstanding, it is not permissible for the respondents to refuse to issue Form-Cs on the ground that tax under other enactments is outstanding. In fact even if there were outstanding dues under the Central Sales Tax Act, it would not be permissible for the respondents to refuse to issue Form-Cs, if the requirements of section 8 of the Act are satisfied. Thus, in the absence of any statutory bar operating against issuance of Form-C to a dealer in respect of the purchases made during the period when he was registered on the ground that his registration is subsequently cancelled, it is not legally permissible for the respondents to deny issuance of C-Forms to him. The respondents are directed to forthwith and not later than two weeks from the date of receipt of this judgment, issue the outstanding C-Form declarations under the Central Sales Tax Act to the petitioner in respect of the purchases made by it during the period when it was registered - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Non-issuance of outstanding C-Form declarations.
2. Legal validity of non-issuance due to outstanding dues under the Value Added Tax Act/Entry Tax Act.
3. Impact of cancellation of registration certificate on issuance of C-Forms.
4. Procedural difficulties due to computerized systems.

Issue-wise Detailed Analysis:

1. Non-issuance of outstanding C-Form declarations:
The petitioner sought a direction for the issuance of outstanding C-Form declarations under the Central Sales Tax Act, 1956. The petitioner, a registered dealer, required these forms for inter-State purchases from Hero Motocorp Limited to claim the benefit of a concessional tax rate. Despite repeated requests, the authorities refused to issue the outstanding C-Forms, citing outstanding dues under the VAT and Entry Tax Acts.

2. Legal validity of non-issuance due to outstanding dues under the Value Added Tax Act/Entry Tax Act:
The petitioner argued that the non-issuance of C-Forms due to outstanding dues under the VAT/Entry Tax Act was without jurisdiction and illegal. The court referred to Section 8 of the Central Sales Tax Act, emphasizing that a registered dealer is entitled to the benefit of a concessional tax rate upon furnishing a duly filled and signed declaration in Form-C. The court held that in the absence of any dues under the Central Sales Tax Act, it was impermissible for the respondents to refuse issuance of C-Forms based on outstanding dues under other enactments.

3. Impact of cancellation of registration certificate on issuance of C-Forms:
The petitioner's registration certificate under the VAT Act was canceled, but not under the Central Sales Tax Act. The petitioner restricted its claim for C-Forms to the period before the cancellation of the VAT registration. The respondents argued that due to the cancellation of the registration, it was not permissible to issue C-Forms even for the period when the petitioner was registered. The court clarified that the petitioner was entitled to C-Forms for purchases made while the registration was in force, and the cancellation of VAT registration did not affect this entitlement.

4. Procedural difficulties due to computerized systems:
The respondents contended that the computerized system could not generate C-Forms for the petitioner due to the cancellation of registration. The court held that procedural difficulties could not defeat the statutory right of the petitioner. If the computerized system could not issue C-Forms, they should be issued manually. The court emphasized that the statutory obligation to issue C-Forms could not be denied due to system limitations.

Conclusion:
The court allowed the petition, directing the respondents to issue the outstanding C-Form declarations within two weeks. The court referenced the decision in Manan Autolink Pvt. Ltd v. State of Gujarat, which held that executive instructions could not substitute statutory provisions for tax recovery. The respondents were obligated to issue C-Forms as per statutory requirements, irrespective of procedural difficulties or outstanding dues under other enactments.