2020 (5) TMI 243 - HC - VAT and Sales Tax

Levy of interest and penalty - turnover on the interstate sales of equipments, machineries and spares not covered by C-Forms - petitioner submitted that the Appellate Tribunal failed to provide reasonable opportunity to the assessee to furnish the declaratory forms - HELD THAT - It is apparent that the petitioner has not placed on record satisfactory material to establish the circumstance of consignment agent and purchasers withholding the concerned declaratory Forms disabling the petitioner in producing the same within the relevant time prescribed under Rule 12(7) of the Rules. Similarly, the original C-Forms now placed before this Court requires to be examined in the light of the material to be placed by the petitioner to substantiate the reasons for the delay subject to authenticity of the documents. It is not in dispute that concessional levy of tax which is provided by the legislature is to the benefit of the assessee, if such benefit is denied on technicalities, the purpose and object of extending the concessional rate of tax would be defeated. Matters remanded to the Appellate Tribunal to reconsider the applications submitted by the petitioner for production of C-Forms as well as original C-Forms now furnished before this Court - appeal allowed by way of remand.

Summary

Issues:
1. Confirmation of penalty under Section 72(2) of the Karnataka Value Added Tax Act, 2003.
2. Confirmation of interest under Section 36 of the Karnataka Value Added Tax Act, 2003.
3. Rejection of C-Forms submitted by the petitioner.
4. Granting additional time to produce C-Forms.

Confirmation of Penalty and Interest:
The petitioner, a registered dealer under the KVAT Act and CST Act, contested penalty and interest imposed by the Assessing Authority for higher tax rates on interstate sales not covered by C-Forms. The First Appellate Authority, following a precedent, allowed concessional tax rates on turnover with C-Forms but upheld penalties and interest. The Appellate Tribunal rejected additional C-Forms submitted by the petitioner, leading to the revision petitions. The Court emphasized the need for genuine C-Forms to justify penalty and interest, remanding the matter to the Tribunal for reconsideration.

Rejection of C-Forms:
The petitioner argued that the Tribunal denied a fair chance to provide C-Forms for concessional tax rates on interstate sales. The AAG countered, stating the burden lies on the assessee to show sufficient cause for late submissions, citing Rule 12(7) of the CST Rules. The Court stressed the importance of timely submission of genuine C-Forms to avail benefits, directing the Tribunal to re-examine the issue considering the reasons for delay and authenticity of documents.

Granting Additional Time for C-Forms:
The petitioner contended that the Tribunal should have allowed more time to furnish C-Forms for concessional tax rates under the CST Act. The AAG argued against entertaining late submissions without sufficient cause. The Court highlighted the necessity of proving reasons for delays in submitting C-Forms, emphasizing that denial of benefits on technical grounds defeats the legislative intent. Consequently, the Court remanded the matter to the Tribunal for a fresh review based on the observations provided.

Conclusion:
The Court, after considering the issues related to penalty, interest, rejection of C-Forms, and granting additional time for submission, directed the Tribunal to re-evaluate the matter in light of the provided guidance. The Court refrained from expressing opinions on legal questions pending the Tribunal's decision on C-Forms. All original C-Forms were returned to the petitioner for Tribunal submission, with the case disposed of, stressing the importance of genuine and timely submission of required documentation for tax benefits.