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2017 (6) TMI 790 - HC - VAT and Sales TaxBenefit of concessional rate of tax at 2% - denial for the reason that the Form C declaration covered more than one quarter, that is, recorded sales for the month in which delivery of goods had been made - the case of appellant is that benefit cannot be denied on the basis of Form C, if, otherwise, the transactions were genuine - whether the Form C declarations filed by the petitioner/ Assessee, could be rejected, only on the ground that they capture the sale transactions relatable to the date, when the delivery of goods took place, as against, when they were despatched? Held that - In terms of provisions of Section 8 of the 1956 Act, the petitioner/ Assessee was entitled to a concessional rate of tax, only if, sale was effected to a registered dealer, in another State and requisite Form C Declaration obtained in that behalf are filed with the prescribed Authority. If, the genuineness of the transaction is not in doubt, then, merely because the Form C declarations captured the transactions from the point of view of the date of delivery as against when they were despatched, cannot be the reason for rejecting the Form C declarations. Circular dated 20.10.2015 would show that the Revenue itself has taken a view that technicalities, to which we have made a reference above, ought not to come in the way of acceptance of declaration forms. A case in point is, when, goods are despatched on the last day of the last quarter of a financial year and, they are recorded by the buyer in his record, based on the date of delivery or receipt and declaration is issued accordingly. In such circumstance, could it be said that the seller would not be given the benefit of the Form C declaration. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the Sales Tax Appellate Tribunal erred in disallowing the concessional rate of tax on inter-State sales based on the Form 'C' Declarations. 2. Whether the Tribunal erred in its interpretation of Section 8(1) read with Sections 8(3) and 9(4) of the CST Act, 1956. 3. Whether the Tribunal erred in disregarding the statement (Annexure L) indicating the turnover subject to tax liability. Issue-wise Detailed Analysis: 1. Disallowance of Concessional Rate of Tax: The primary issue revolves around the disallowance of the concessional rate of tax on inter-State sales made by the petitioner to M/s. Savex Computers Limited and M/s. Karuna Management Services Private Limited. The Assessing Officer had levied a tax rate of 12.5%, instead of the concessional rate of 2%, due to discrepancies in the Form 'C' Declarations. The Tribunal upheld this decision, noting that the declarations covered more than one quarter and were thus defective. The Tribunal emphasized that the declarations must be corrected and resubmitted, which the petitioner failed to do within the stipulated time. 2. Interpretation of Section 8(1) read with Sections 8(3) and 9(4) of the CST Act, 1956: The petitioner argued that the substantive requirements of Section 8(1) read with Sections 8(3) and 9(4) of the CST Act, 1956, were satisfied. The petitioner contended that the Form 'C' Declarations should be accepted as they captured the sales transactions based on the date of delivery rather than the date of dispatch. The petitioner relied on Rule 12(7) of the Central Sales Tax Rules, 1957, which allows for declarations to be filed within three months after the end of the period to which they relate. The Tribunal, however, maintained that the declarations must align with the date of dispatch, not delivery. 3. Disregarding the Statement (Annexure L): The petitioner submitted Annexure L, indicating that the overlapping turnover was significantly lower than the amounts assessed. The Tribunal did not consider this statement, which the petitioner argued would reduce the tax liability. The petitioner claimed that the turnover for M/s. Savex Computers Limited was ?6,62,95,215/- and for M/s. Karuna Management Services Private Limited was ?20,44,660/-. Judgment Analysis: The High Court noted that the only issue was whether the Form 'C' Declarations could be rejected solely because they captured transactions based on the delivery date rather than the dispatch date. The Court held that if the genuineness of the transactions was not in doubt, the declarations should not be rejected on such technical grounds. The Court referred to a Circular dated 20.10.2015, which clarified that declarations should not be rejected based on the date discrepancies if the principal objective of ensuring goods were dispatched to registered dealers was met. The Court also highlighted Rule 10(2) of the T.N. Rules, which allows declarations to be filed any time before the final assessment of the accounts for that year. The Tribunal had overlooked this provision. The High Court set aside the Tribunal's judgment and directed the Assessing Officer to reexamine the matter, considering the Court's observations. The questions of law were answered in favor of the petitioner, and the tax case revision was disposed of without any order as to costs.
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