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TMI Blog2015 (5) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... ding stating that he has inquired from the purchaser about the validity of the C-Form. As per original record, here is a huge scam in respect of C-Form submitted by the company like petitioner and similarly other situated companies who are in the business of crude soya oil, cotton seed oil and doing refinery business and due to bogus Forms / non-verified C-Form, the State of Madhya Pradesh suffered a loss of more than 200 crores. The fact that number of C-Forms were found fake as the same were not issued by the concerned department and rest of the C-Forms were not verified on the basis of verification report, we are of the view that no case to interfere with the order of reassessment and penalty, as prayed is made out - petition dismissed - decided against petitioner. X X X X Extracts X X X X X X X X Extracts X X X X ..... ak Traders Indian Soya Industries 13,49,27,895 5,91,223 13,43,36,662 CTO Malegaon Nasik Difference in C-form amount 7 06-07-2015 MH07/9670950 Aditya Traders Maharashtra Indian Soya Industries 47,60,82,979 - - CTO Malegaon Nasik C-form issued in office but details of C-form amount not available WP/5859 of 2015 Sr. No. Date of order C-Form No. Name of issuing Co. Issued to whom Amount mentioned by the Co. in C-Form Actual amount mentioned in C-Form Difference in amount Name of the office Remarks 1 2 3 4 5 6 7 8 9 10 1 06-07-2015 MH07/ 0508341 Gagan Traders, Maharashtra Indian Soya Industries 42,88,18,565 6,50,336 42,81,68,229 CTO Malegaon Nasik Difference in C-form amount 2 06-07-2015 MH07/ 0508342 Gagan Traders, Maharashtra Indian Soya Industries 31,12,14,853 8,70,065 31,03,44,788 CTO Malegaon Nasik Difference in C-form amount 3 06-07-2015 MH07/ 0278248 Gagan Traders, Maharashtra Indian Soya Industries 29,49,61,906 3,77,065 29,45,84,841 CTO Malegaon Nasik Difference in C-form amount 4 06-07-2015 MH07/ 0278249 Raj Sales Corporation, Maharashtra Indian Soya Industries 35,15,27,184 3,74,544 35,11,52,640 CTO Mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner, Agra (U.P.) came to know that the C-Forms submitted by the petitioner during the original assessment proceedings were not verified, number of C-Forms were not issued by the department, huge difference of amount as per column number 10 of the chart reproduced herein above and have re-opened the case for reassessment period 2006-07, 2007-08 and 2008-09. A show cause notice was issued to the petitioner and thereafter, after giving full opportunity, the order impugned of reassessment has been passed by which difference of tax @ 3% and penalty equals to three times has been imposed because the petitioner was assessed at the rate of 2%. 6. The stand of the State that the petitioner firm was assessed at the rate of 2% as the petitioner firm submitted C-Form(s) in respect of interstate sale of crude soya oil, but after verification from the concerned State it was found that number of C-Forms were not issued in favour of the petitioner purchaser or the C-Form found to be not genuine and, therefore, reassessment was done and the petitioner has been assessed @ of 5% along with three times penalty of the tax. It is also pointed out that the issue of genuineness of C-Form come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner cannot be made liable for the usage of any false document by the purchasing dealer. The C-Forms obtained from the original purchaser were obtained in bonafide manner, which they belief that the same are genuine. The petitioner cannot be made liable for the false or forged documents, if any. Therefore, no tax can be levied on the petitioner on the ground that the C-Forms being invalid or on the ground of improper verification or no verification of C-Form. It is contended that no criteria was available to the petitioner to verify the genuineness of C-Form nor was its duty to do in normal course of carrying out business. Also, it was nowhere alleged by the authorities that the petitioner was in collusion with any one in relation to the making and production of false documents, if any. The 'C' Forms were duly sealed by the concerned sales tax officer and obtained by the purchasing dealers. There is no basis of disbelief by the petitioner that the documents are not genuine or not issued by the sales tax officers. There is no mala fide action or any deliberate attempt on the part of the petitioner to make use of any false documents and prayed for quashment of impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceeding stating that he has inquired from the purchaser about the validity of the C-Form. It is also pointed out by the learned Dy. Advocate General that in general, the department has found that from 2007-08 to 2011-12, most of the cases in relation to soya oil / crude oil, C-Forms have been issued to be invalid, therefore, it was a fit case for reopening on the basis of information received from the State of Maharashtra and other States and, therefore, reassessment has been done after due opportunity of hearing. 12. As per original record, here is a huge scam in respect of C-Form submitted by the company like petitioner and similarly other situated companies who are in the business of crude soya oil, cotton seed oil and doing refinery business and due to bogus Forms / non-verified C-Form, the State of Madhya Pradesh suffered a loss of more than ₹ 200 crores. The matter has been also verified by the Assistant Commissioner - Commercial Tax Anti Evasion Bureau. The matter was reported to the higher authority, but at the best to the knowledge of the respondents none of the matter has been forwarded to the C.A.G., Economic Offence Wing of the Government of M.P. or C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner - selling purchaser to pay the amount. The petitioner inspite of number of opportunities granted by the Department failed to examine any one to prove that C Forms, which he has submitted along with the return was not bogus or fictitious. Thus, we are of the view that the petitioner - assessee would lose the benefit of the deduction claimed by him and is liable to pay the amount of difference of tax, which he may ultimately recover from the purchasing dealers in accordance with law. 16. In the case of State of Madras v/s. Radio & Electricals (supra), the Supreme Court recognized that the seller can have no control over the purchaser in such transactions and has to necessarily rely upon the representations made to him by the purchasing dealer. According to the Supreme Court the duty of the selling dealer is only to satisfy himself that purchaser is a registered dealer and the goods purchased are specified in his registration certificate and no further. He is under no obligation to see that the application of the goods for the purpose for which it was represented that they were intended to be used. This indicates that for the act's of the purchaser dealer, the selling dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority also granted sufficient opportunity to the petitioner to produce the valid C - Forms of purchasing dealer nor he filed any document to prove that at the relevant point of time 'C' Forms in respect of the transaction in question has been issued by the authority to the producing dealer and, thus, sufficient compliance with requirement of law has been made by the Department and the selling dealer is not entitled to lower rate of taxation. The order passed by the revisional authority vide order dated 16/4/2014 is just and proper. No case to interfere with the order impugned as prayed by the learned counsel for the petitioner is made out. The Writ Petition No.6226/2014 and Writ Petition No.6227/2014, have no merit and are accordingly, dismissed. No order as to costs." 14. Consequently, for the above mentioned reasons, so also the fact that number of C-Forms were found fake as the same were not issued by the concerned department and rest of the C-Forms were not verified on the basis of verification report, we are of the view that no case to interfere with the order of reassessment and penalty, as prayed is made out. The writ petitions filed by the petitioner have no me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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