C form against interstate sales, VAT + CST

[Harsha Seenappa]

Dear Sir/Madam,

What action can be taken by concerned state sales authorities against the default firms who failed to furnish the 'C' form to seller of the product for having purchased the good on CST Transaction against 'C' form on interstate basis i.e 2009-10,2011-12,2012-13,2013-14,2014-15 under CST act 1956.

Posts / Replies

[CA Sumit Aggarwal]

Dear Harsha

From your query it appears that you are asking the implication on purchasing dealer and accordingly my view is as follow:

Firstly, the liability to deposit the tax on seller and not on the buyer. In case, the buyer is not furnishing the Form C to seller then the seller is required to deposit the differential tax with the department.

Further to add, the Hon’ble HC in the case of Lloyd Bitumen Products Ltd. v. ONGC - 89 STC 42 (Cal HC DB) = 1990 (3) TMI 352 - CALCUTTA HIGH COURT held that if the buyer fails to submit ‘C’ Form, difference in tax amount can be recovered from buyer.

Hope you will find the same in order.

[Pradeep Khatri]

Legal remedy for non-receipt of Form C under CST Act, 1956.

If, for any reason Form-C is not forwarded by the purchasing dealer to the selling dealer, then, the only recourse available is to file a suit for recovery against the Sales Tax Department from purchasing dealer or arbitration clause under the agreement. Hence, no writ petition of mandamus could be issued to the private respondents for issuance of Form-C. Therefore, matter decided against Assessee.  Saraya Distillery versus Union of India and Others. 2015 (3) TMI 299 - Allahabad High Court,

[Naveed S]

 

(i) Availing of concession is dependent upon filing of Form C. Non-filing of Form C or filing of defective Forms C may only render the assessee liable to pay at the full rate of taxation without the benefit of concessional rate, and the filing of Forms C being optional and a mere condition to avail of the concessional rate contemplated in the statutory provision as such, the lapse, if any, cannot be considered to operate as a penal or forfeiture clause. Being an optional benefit available, non-availing of the same or non-compliance of such provision, in any event, cannot be held to be non-compliance with the provisions of the Act, Rules and Notifications- Gujarat Ambuja Cement Ltd. Vs. Assessing Authority (2000) 118 STC 315 (HP).= 1999 (8) TMI 931 - HIMACHAL PRADESH HIGH COURT

(ii) In R.S. Cotton Mills vs State of Punjab, the Punjab and Haryana High Court held that C or D forms could be filled even after the filing of the return or at the appellate stage and same could be taken cognizance of.

Hence, C form can be submitted even after the filing of the annual statement i.e. at the time of assessment or afterwards and same can be taken cognizance of since no loss is caused to the revenue by not filing the C forms alongwith annual statement, provided sufficient cause is shown for late submitting the C forms.