2008 (7) TMI 937 - HC - VAT and Sales Tax

Whether on the facts and in the circumstances of the case the Trade Tax Tribunal was legally justified to direct the assessing authority to accept the counterfoil of form III-B and to allow the exemption on that basis? Held that - This court is of the view that the Tribunal was not legally justified in directing the assessing authority to accept the counterfoil of form IIIB and to allow the exemption on that basis. In the result the revision succeeds and is allowed and it is held that the direction of the Tribunal with regard to form IIIB bearing No. 87566 is not justified. The said direction is therefore set aside.

Summary

Issues:
Challenging the legality and validity of the Tribunal's order dated February 7, 2000 regarding Second Appeal No. 80 of 1998 for the assessment year 1994-95 (U.P.).

Analysis:
The Department filed a revision against the Tribunal's order which allowed the appeal in part and remanded the matter to the assessing authority. The main contention was regarding the acceptance of the counterfoil of form IIIB (form No. 87566). The Department argued that without the original copy of form IIIB, no benefit based on the counterfoil can be extended to a dealer, citing a judgment of the apex court. The dealer-opposite party supported the Tribunal's order. The questions of law raised in the memo of the revision pertained to the legal justification of the Tribunal's direction to accept the counterfoil of form III-B and allow exemption based on it, in light of relevant legal provisions and previous judgments.

The court examined sub-rules of the U.P. Trade Tax Rules, particularly rule 25B(1) and (15), which outline the procedure for furnishing a certificate in form IIIB and the issuance of a duplicate declaration form in case of loss. The court noted that the dealer in question did not attempt to obtain a duplicate declaration form as required by the rules. It referenced a previous judgment which clarified that the necessity of obtaining a duplicate form arises only under specific circumstances, emphasizing the importance of following the prescribed procedures.

Referring to a judgment of the apex court in a similar case under the Central Sales Tax Act, the court highlighted the strict adherence to filing the original declaration form as required by law. The purpose behind such provisions is to prevent sales suppression and tax evasion. The court emphasized that the legislative provisions should be strictly followed, and any hardship should be addressed by the Legislature. Additionally, the court pointed out that the provision of sub-rule (15) aimed to provide a mechanism for obtaining a duplicate form in case of loss, which was not utilized by the dealer in this case.

In conclusion, the court held that the Tribunal was not legally justified in directing the assessing authority to accept the counterfoil of form IIIB for extending exemption benefits. The revision was allowed, and the direction regarding form IIIB bearing No. 87566 was set aside. No costs were awarded in this matter.