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TMI Blog2008 (8) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... ed nor manufactured inside the State. These are purely disputed questions of fact. Such factual disputed questions cannot be adjudicated by this court in exercise of its writ jurisdiction. Hence, the Revenue authorities may proceed with the assessment after affording reasonable opportunity of hearing to the petitioner and confronting it with the materials collected against it that the goods dealt with by it are manufactured in the State of Orissa. The petitioner shall also have right to adduce evidence in support of its contention that goods dealt with by him are neither produced nor manufactured inside the State of Orissa. However, it is made clear that the Revenue authorities, in the circumstances of the case, cannot suspend the registration certificate of the petitioner. Applications of the petitioner for supply of declaration in forms "C" be considered and dispose of in accordance with law without any delay. X X X X Extracts X X X X X X X X Extracts X X X X ..... urt will take a decision for payment of entry tax by the petitioner. In the said letter, the petitioner also requested to issue "C" forms to it. On the said date, the STO passed order to consider issue of four sheets of "C" forms. On the same day, CTO-O.P. No. 3 directed to assess the petitioner provisionally and to inform the Assistant Commissioner of Sales Tax (hereinafter referred to as, "the ACST") to suspend the registration certificate of the petitioner for non-payment of entry tax. Further direction was given to issue only two sheets of "C" form. On June 7, 2008, the petitioner wrote a letter vide annexure 5 to the STO for supply of balance 23 sheets of "C" forms disclosing details of its requirement. On June 10, 2008, the STO sought clarification from the ACST regarding payment of Orissa entry tax. Mr. S.C. Lal, learned counsel appearing on behalf of the petitioner, vehemently argued that the petitioner being a registered dealer is entitled to purchase goods at concessional rate of tax by furnishing "C" forms to the outside State registered dealer. The "C" forms are secured documents and are supplied by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that even though on April 23, 2008, the opposite party No. 4 was directed to issue ten sheets of "C" form, the same was not issued to the petitioner arbitrarily. In course of hearing of this petition, very strong dissatisfaction was expressed at the Bar with regard to conduct of the Revenue authorities in issuing statutory forms like declaration in forms "C" and "F", way-bill, etc. Per contra, learned counsel appearing on behalf of the Revenue submitted that in order to prevent misuse of "C" forms, the STO is justified to regulate the supply of the same. He further submitted that on enquiry it was found that the goods dealt with by the petitioner are manufactured in the State of Orissa, and, therefore, the petitioner is liable to pay the entry tax and if the petitioner does not pay the entry tax opposite parties 3 and 4 are justified in their action in not issuing the declaration form "C". On rival contentions of the respective parties, the following questions fall for consideration by this court: (i) Whether, on the facts and circumstances of the case, a dealer registered under the CST Act is entitled to get adequate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated at the rate of ten per cent or at the rate applicable to the sale or purchase of goods inside the appropriate State, whichever is higher. . . . (3) the goods referred to in clause (b) of sub-section (1)-- . . (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in the telecommunications network or in mining or in the generation or distribution of electricity or any other form of power; (c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c). (4) The provisions of sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to avail the concessional rate of tax the selling dealer must obtain declaration in form "C" from the purchasing dealer and also collect such concessional rate of tax from the buying dealer. If the buying dealer fails to furnish declaration in form "C" to the selling dealer, the selling dealer shall levy and collect higher percentage of tax as provided in section 8(2)(a) and (b). Thus, the buying dealer in order to pay concessional rate of tax to the selling dealer must have to furnish declaration in form "C" to the selling dealer. This form he has to obtain from the prescribed authority who shall supply the same to a registered dealer as provided in rule 12 of the CST (R&T) Rules. The relevant provision of rule 12 of the CST (R&T) Rules is reproduced below: "12(1). The declaration and the certificate referred to in sub-section (4) of section 8 shall be in forms 'C' and 'D', respectively: . . . ." Rule 6 of the CST (O) Rules deals with authority from which declaration forms may be obtained, use, custody and maintenance of records of such forms and matters incidental thereto. The relevant provisions of rule 6 of the CST (O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso says that no second or subsequent supply of declaration form shall be made to any dealer unless he furnishes to the notified authority a true copy of accounts certified by him under his signature of the forms last supplied to him as maintained in form V referred to in clause (d). The third proviso says that for the purpose of this sub-rule the application shall be signed by any person who is authorised to sign the return under rule 11. Under the provisions of section 8(1) of the CST Act read with rule 8(4), a registered dealer has a right to obtain declaration form from the prescribed authority in order to avail concession in payment of tax on inter-State transactions. Neither section 8 of the Act nor rule 12 imposes any restriction on supply of "C" declaration form by the notified authority to a dealer registered under the Act. Under the provisions of section 10 of the CST Act only if a person misuses the "C" form he is liable to penalty. It is only rule 6 of the CST (O) Rules which imposes certain restriction on supply of "C" declaration form. A coherent reading of section 8 of the Act, rule 12 of the CST (R&T) Rules and rule 6 of the CST (O) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application has not been signed by the person who is authorised to sign return under rule 11. The only ground for which the opposite parties 3 and 4 refused to issue declaration in form "C" is that the dealer failed to pay entry tax on the goods purchased from outside State. The stand of the petitioner is that he is not liable to pay entry tax on purchase of goods from outside the State as those were not produced or manufactured inside the State and this court in O.J.C. No. 6515 of 2006 (Reliance Industries Limited v. State of Orissa [2008] 16 VST 85) disposed of on February 18, 2008 held in such an event no entry tax is leviable. In his explanation dated April 24, 2008 (annexure 2) the petitioner explained as follows: "We have not paid the entry tax because of the decision of the honourable High Court dated February 18, 2008 in the case W.P. (C) No. 6515 of 2006 (Reliance Industries Limited v. State of Orissa [2008] 16 VST 85). The goods brought by me are not produced or manufactured in the State of Orissa." Rule 6 of the CST (O) Rules provides for payment of Rs. 21 for 25 numbers of blank declaration "C" forms. From the said provision it appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nial of the way-bills is not the proper way to recover the tax. Thus, the sales tax authorities cannot refuse adequate number of declaration forms to the petitioner on the ground that he has not paid entry tax, on the basis of the judgment of the High Court passed in O.J.C. No. 6515 of 2006 [Reliance Industries v. State of Orissa [2008] 16 VST 85 (Orissa)] disposed of on February 18, 2008 which was challenged in the honourable Supreme Court. Even if the dealer would be found to be liable to pay entry tax, that cannot be a ground to refuse issue of "C" forms to the petitioner. It is expressed at the Bar that registered dealers are prevented from carrying on their business smoothly as the selling registered dealers of outside the State express their reluctance for selling goods to the registered dealers of the State at a concessional rate of tax as they do not get "C" forms in time. It is a matter of grave concern. A State cannot financially develop unless its trade and commerce flourish. This should be kept in the mind of the Revenue authorities. Every citizen of the country has a fundamental right to carry on business. It does not depend upon the hims and capr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms are issued in piecemeal manner without any justification. Such unwarranted delayed practice of issuing the "C" forms on the part of the statutory authorities is certainly undesirable and liable to be deprecated. Necessary steps should be taken to minimise such practice of arbitrary use of power. This is not a healthy practice on the part of the authorities acting on behalf of the Revenue in the matter of collection of tax. In order to gain faith of the assessees and create confidence in the minds of the taxpayers for smooth administration of tax law, the sales tax authorities must act in a fair and legal manner. The honourable Supreme Court in Dabur India Ltd. v. State of Uttar Pradesh AIR 1990 SC 1814, observed that Government, Central or State, cannot be permitted to play dirty games with the citizens of this country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the Government, the Government should take appropriate steps, but it should not take extra-legal steps or adopt the course of manoeuvring. Because of the above discontentment expressed by the Bar it has become necessary to provide guidelines fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x court in the case of Union of India v. Kamlakshi Finance Corporation Ltd. AIR 1992 SC 711, in paragraph 6 has observed as follows: ". . . The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of juridical discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not 'acceptable' to the department--in itself an objectionable phrase--and is the subjectmatter of an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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