2021 (11) TMI 436 - HC - VAT and Sales Tax

Concessional rate of tax - acceptance of forms 3-B furnished before the assessing authority - said forms 3-B cannot be accepted as the same are filed after the period as indicated under Rule 25- B(3) of the U.P. Trade Tax Rules - entire documents including the record of trade tax have been seized by the CBI, New Delhi at the time of their raid conducted on 24.12.2005 and the same are returned to the revisionist only on 17.08.2007 - non-exclusion of period of seizure of documents by the CBI, New Delhi for the purposes of calculation of the period for submission of forms as provided under Rule 25-B(3) of the U.P. Trade Tax Rules - HELD THAT - Admittedly, the assessment years pertain to 2003-04 2005-06. In view of the amendment in rule 25-B(3) of the U.P. Trade Tax Rules, the benefit was only extended for submission of form within two years of transaction. In the case in hand, forms were submitted after the prescribed period mentioned in the said Rules. The only stand taken by the revisionist is that its books of account were under the custody of CBI and was only handed over on 17.08.2007. Therefore, the revisionist could not comply with the said provision. On close scrutiny of the said submission, this Court, with due respect, finds that the judgement of the Single Judge in M/S NARBADA INDUSTRIES VERSUS C.C.T 2017 (4) TMI 134 - ALLAHABAD HIGH COURT is per incurium as the Division Bench of this Court, in the case of M/S. ORIENTAL CARBON CHEMICALS LTD. VERSUS STATE OF UP. ANOTHER 2010 (12) TMI 1075 - ALLAHABAD HIGH COURT , on an identical set of fact, has held that the period of limitation prescribed in Rule 25 cannot be extended. In view of the law laid down by the Division Bench of this Court in M/s Oriental Carbon, wherein, validity of the provisions of Rule - B(3) was upheld as well as the benefit of form cannot be extended beyond two years of the transaction, the Tribunal has rightly refused to grant the benefit of exemption to the assessee - revisionist. Both the revisions fail and are hereby dismissed.

Summary

Issues:
1. Interpretation of Rule 25-B(3) of the U.P. Trade Tax Rules regarding acceptance of Form 3-B for concessional rate of tax.
2. Impact of seizure of documents by CBI on the submission of forms and claim of concessional rate of tax.
3. Exclusion of the period of document seizure by CBI for calculating the submission period under Rule 25-B(3).

Analysis:
1. The case involved a dispute related to the acceptance of Form 3-B for concessional rate of tax under Rule 25-B(3) of the U.P. Trade Tax Rules. The revisionist argued that due to the seizure of their documents by the CBI, they were unable to submit the forms within the prescribed period. The revisionist relied on a judgment in M/s Narbada Industries case but the Court found that a Division Bench decision in M/s Oriental Carbon case held that the limitation period cannot be extended. The Court emphasized that Form 3-B must be filed within two years of the transaction, as established in previous judgments like M/s Coco Form Industries and M/s K.B. Hides. Consequently, the Tribunal rightly denied the benefit of exemption to the revisionist, leading to the dismissal of the revisions.

2. Regarding the impact of the CBI's document seizure on the submission of forms and the claim of concessional rate of tax, the revisionist argued that the delay was due to the custody of their books of account by the CBI until 17.08.2007. However, the Court noted that the prescribed period for submitting Form 3-B was not extended due to the circumstances of document seizure. The Court clarified that the benefit of the form can only be granted if filed within two years of the transaction, as per Rule 25-B(3), and the revisionist's submission beyond this period did not warrant an extension.

3. The issue of excluding the period of document seizure by the CBI for calculating the submission period under Rule 25-B(3) was also addressed. The revisionist contended that the period of document seizure should be excluded from the calculation. However, the Court upheld the principle that the limitation period for submitting Form 3-B cannot be extended beyond two years from the transaction date. Relying on precedents like M/s Oriental Carbon and M/s Coco Form Industries, the Court emphasized the strict adherence to the prescribed rules and denied the revisionist's claim for an extension based on the period of document seizure.

In conclusion, the Court found no substantial question of law arising from the case, leading to the dismissal of both revisions based on the established legal principles and precedents cited in the judgment.