Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2021 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 1338 - HC - VAT and Sales TaxTaxability - Undenatured ethyl alcohol of any alcoholic strength (including neutral and extra neutral alcohol) when used in the production of alcoholic liquors for human consumption - C Forms - F Forms - HELD THAT:- From the evaluation of various provisions of the CST Act, 1956, CST Rules, 1957, or the Goa Rules, 1973 it is clear that the subject of issuance of C and F Forms is squarely governed by the statutory provisions that prescribe not only the authorities competent to issue these forms but also the conditions subject to which such forms are to be issued. Admittedly, the OM dated 21.04.2021 is like an executive instruction. Such an executive instruction cannot interfere with the statutory provisions or introduce any additional conditions of furnishing the impugned undertaking, when in fact the statutory provisions do not provide or contemplate the issuance of any such undertaking. The Court after analyzing and listing the conditions prescribed by the CST Act, 1956, CST Rules, 1957, and the Jharkhand Rules, 2006 proceeded to formulate the conditions that a dealer is required to fulfill before he can insist upon the State issuing the C Form. The High Court then concluded that once these conditions are fulfilled, there is a corresponding duty on the State to issue the C Forms and further, the State authorities cannot refuse the C Forms at the whims and caprice of the officers of the State. The High Court held that sometimes, over-anxious officers of the State fall in the track (sic) of looking at the nature of the transactions or looking to the uses of C Forms by the registered dealers and held that this is not permissible at the stage of issuance of C Forms. - The Court analyzed the various provisions and concluded that under the provisions of Section 8(1) of the CST Act read with Rule 8(4), a registered dealer has a right to obtain a declaration form from the prescribed authority to avail concession in payment of tax on inter-State transactions. Neither Section 8 of the Act nor Rule 12 imposes any restriction on the supply of "C” declaration form by the notified authority to a dealer registered under the Act. Under the provisions of Section 10 of the CST Act only if a person misuses the "C" form he is liable to a penalty. It is only Rule 6 of the CST (O) Rules which imposes certain restrictions on the supply of the “C“ declaration form. It is quite apparent that the State upon perceiving that the statutory provisions may not be sufficient to protect its interests at revenue collection has virtually attempted to add to or alter the statutory provisions enacted by the Central Government. Merely styling such acts as filling the vacuum in the legislation or supplementing the legislative vacuum is not sufficient to mask the true nature of the exercise - the presumption of constitutionality that attaches to legislation does not extend to an executive act or an executive instruction like the OM in the issue. The impugned direction and the impugned undertaking are declared ultra vires and the respondents are restraint from enforcing the same. As a consequence, it is directed that the respondents to consider petitioners' applications for issuance of C and F Forms in accord with the law but without insisting upon the petitioners furnishing the impugned undertaking - petition disposed off.
|