2019 (3) TMI 440 - HC - VAT and Sales Tax

Inter-state sales or local sales - incorrect Form-C - Whether, on the facts and in the circumstances of the case and on a true and correct interpretation of Section 3(a) of the Central Sales Tax Act, 1956, the Appellate Tribunal is justified in law in treating the local sales effected by the petitioner s branch in Bangalore to M/s.Shree Renuka Sugars Ltd., Karnataka as inter-State sales by the petitioner based on the incorrect C form issued by M/s.Shree Renuka Sugars Ltd., Karnataka? Held that - We are not a fact finding authority and exercising power under Section 60(1) of the TNVAT Act, we have to decide the substantial question of law. The exercise, which we are invited today by the petitioner, is clearly the role of the Tribunal or for that matter the first appellate authority. In any event, we do not want to foreclose the rights of the petitioner, since it is the consistent case of the petitioner that those two entries shown in the Form C declaration are dated 18.09.2009 is a genuine mistake. In fact, though the first appellate authority pointed out that the mistake should have been rectified in the online entries maintained in the State of Karnataka, he did not issue any direction to the Assessing Officer to return the Form C declaration, which was found in page 187 of the assessment file. If that course had been adopted, in all probabilities, the Commercial Taxes Authority of the State of Karnataka may have even rectified the Form C declaration. Bearing this in mind, we propose to issue appropriate directions to enable the petitioner to obtain necessary correction in the Form C declaration. The tax case revision is disposed of by directing the petitioner s Assessing Officer to return the subject Form C declaration within a period of two weeks from the date of receipt of a copy of this order.

Summary

Issues:
1. Interpretation of Section 3(a) of the Central Sales Tax Act, 1956 regarding local sales treated as inter-State sales.
2. Rectification of errors in Form 'C' declaration for tax assessment purposes.

Analysis:

1. The petitioner, a dealer, challenged an order by the Tamil Nadu Sales Tax Appellate Tribunal regarding the assessment year 2008-09 under the Central Sales Tax Act, 1956. The dispute arose from the treatment of local sales as inter-State sales based on incorrect Form 'C' declarations. The first appellate authority found errors in the declaration and supported the petitioner's claim of local sales. However, the Tribunal reversed this decision, stating that corrections should be made online and not through duplicate forms.

2. The High Court, while not being a fact-finding authority, considered the substantial question of law regarding the interpretation of Section 3(a) of the CST Act. The Court acknowledged the petitioner's claim of genuine mistakes in the Form 'C' declaration and directed the Assessing Officer to return the form for correction within two weeks. The petitioner was granted eight weeks to rectify the errors, emphasizing the importance of accurate documentation for tax assessments. The Court left the substantial legal question open for further consideration.

In conclusion, the judgment focused on rectifying errors in Form 'C' declarations to ensure accurate tax assessments and emphasized the need for proper documentation in compliance with the Central Sales Tax Act. The Court's decision provided a pathway for the petitioner to correct the errors and highlighted the importance of procedural compliance in tax matters.