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TMI Blog2017 (7) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... aming statutory rules in exercise of powers under sub-sections (3) and (4) of Section 13 of the CST Act, we would have examined the question further. However, the circular in the form of executive instructions cannot take shape of a statute. What is envisaged in sub-sections (3) and (4) of Section 13 is the power of delegated legislation vested in the State Government for carrying out the purposes of the CST Act. Such rule making power cannot be substituted by executive instructions. The circular in question is certainly not in exercise of the rule making powers exercised by the State Government. The action of the respondents in not allowing the petitioner to generate C form solely on the ground that the petitioner had not paid the self assessed tax for the relevant period under the VAT Act is illegal. The respondents shall allow the petitioner to generate C form subject to other conditions being fulfilled - petition allowed - decided in favor of petitioner. - SPECIAL CIVIL APPLICATION NO. 4518 of 2017 - - - Dated:- 17-7-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Petitioner : Trupesh C Kathiriya, Advocate For The Respondent : Mr Pranav Trivedi, Asst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons by the State authorities of the C forms have been done away with since the year 2008. This has been replaced by an online system as per which the dealer would be in a position to generate his own C forms as long as he fulfills the conditions prescribed by the State authorities. According to the respondents, one of the conditions contained in circular dated 16.11.2009 is that the dealer should have filed his periodical quarterly returns and should have paid the self assessed tax as per such returns and generated a computerized receipt for the same. The department explains that since the petitioner had not fulfilled the essential condition of payment of self assessed tax, the online system of the department would not permit the petitioner to obtain C form declarations. 3. This in nutshell is the controversy. Counsel for the petitioner submitted that the petitioner ran into serious financial difficulties due to which the petitioner could not discharge its tax obligations. The petitioner would be in a position to pay up the taxes if installments are granted. Not granting C form declarations to the petitioner would put the petitioner s selling dealers to great hardships since suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. 7. In terms of sub-section (1) of Section 8 of the CST Act, thus, reduced rate of tax would be levied from a selling dealer in case of inter-State sale, provided a declaration as provided in sub-section (4) of Section 8 is furnished. The declaration has to be obtained by the purchasing dealer which when provided to the selling dealer, reduced rate of tax in terms of sub-section 8 would apply. 8. Section 9 of the CST Act pertains to levy and collection of tax and penalties. As per sub-section (1) of Section 9, the tax payable by any dealer under the said Act on sale of goods in course of inter-State trade or commerce would be levied by the Government of India but shall be so collected by the State from which the movement of goods commenced. Sub-section (2) of Section 9 in turn provides that subject to the provisions of the Act and the rules made thereunder, the authorities for the time being empowered to assess, reassess, collect and enforce payment of tax under the GST law of the appropriate State shall on behalf of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate referred to in sub-section (4) of section 8 shall be in Forms C and D respectively: [Provided that Form C in force before the commencement of the Central Sales Tax (Registration and Turnover) (Amendment) Rules, 1974, or before the commencement of the Central Sales Tax (Registration and Turnover) (Amendment) Rules, 1976, may also be used upto the [31st December, 1979] with suitable modifications:]] [Provided further that a single declaration may cover all transactions of sale, which take place in a quarter of a financial year between the same two dealers: Provided also that where, in the case of any transaction of sale, the delivery of goods is spread over to different quarters in a financial year or of different financial years, it shall be necessary to furnish a separate declaration or certificate in respect of goods delivered in each quarter of a financial year.] 11. We may now refer to some of the provisions contained in the VAT Act. The Act contains detailed provisions for assessing and levying taxes. It also contains provisions for dispute resolutions with respect to the liability of dealers to pay taxes. Chapter 5 of the VAT Act pertains to returns, payment of tax, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Sales Tax (Turnover Registration) Rules, 1957. Rule 12 pertains to furnishing declarations and certificates. Sub-rule (1) provides that declarations and certificates referred to in sub-section (4) of Section 8 shall be in Forms C and D respectively. 13. None of these rules prescribe that before the purchasing dealer can generate a request for authentication of C form by the appropriate authority, the dealer must have discharged its full liability of the VAT. As noted in the VAT Act, detailed provisions have been made for assessment and collection of tax. In absence of a specific rule requiring depositing of full tax before obtaining C form authentication, such a requirement cannot be introduced by the State Government. Learned Assistant Government Pleader would, however, contend that Section 13 of the Central Sales Tax Act gives wide powers to the State Government of framing rules. Our attention was drawn to sub-rule (3) and sub-rule (4) thereof. As noted, sub-section (3) empowers the State Government to make rules not inconsistent with the provisions of the Act and the rules made under sub-section (1) of Section 13 by the Central Government to carry out the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re shall thereafter be no further need for certification or authentication of such C forms by any departmental authority. If this condition is not satisfied, the website of the department would not permit the dealer to generate the C forms. Thus, through a condition prescribed in the said circular, the State Government requires that a dealer must have discharged all his self assessed tax liabilities before C forms can be obtained in connection with any of his dealings. Essentially, this amounts to a mode of tax recovery. Even if it is self assessed tax, the prescription of the circular does not lose its essential character of one being in the nature of tax collection. Unless and until such a condition is backed by any statutory provision, it would not be possible for the State Government to provide such a mode of tax recovery making it a pre-condition for generation of C forms. As noted, had such a condition been introduced by framing statutory rules in exercise of powers under sub-sections (3) and (4) of Section 13 of the CST Act, we would have examined the question further. However, the circular in the form of executive instructions cannot take shape of a statute. What is envisag ..... 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