2025 (5) TMI 1902 - HC - VAT / Sales Tax

Rejection of application filed by the Petitioner for issuance of Form F in respect of the goods transferred under inter-state trade and commerce - HELD THAT - Following the decision of the Co-ordinate Bench of this Court in GSP Power System Pvt. Ltd. 2020 (10) TMI 215 - DELHI HIGH COURT in the facts of the present case the Petitioner is permitted to rectify its DVAT returns for the third quarter of 2018-19 by filing a revised return for the said period to enable issuance of the statutory F Forms. These directions shall however remain suspended till the appeal in Ingram Micro India Pvt. Ltd. as also the M/s Commissioner VAT Delhi Ors. v. M/s Indian Oil Corporation Ltd. are pending before the Supreme Court and are decided. This direction shall abide by the decision of the Supreme Court in the said case. Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the petitioner is entitled to issuance of statutory Form 'F' for goods transferred under inter-state trade and commerce, following rectification of returns filed under the Delhi Value Added Tax (DVAT) Act and Central Sales Tax (Delhi) Rules?

- Whether the petitioner can revise or rectify its DVAT returns to include details omitted earlier, particularly relating to inter-state branch transfers?

- Whether the Department of Trade and Taxes was justified in rejecting the petitioner's application for issuance of Form 'F' and refusal to allow revision of returns?

- The impact of pending appeals and stays granted by the Supreme Court on the enforcement of High Court decisions concerning revision of returns and issuance of statutory forms under the DVAT Act and Central Sales Tax Rules.

- The appropriate course of action in light of multiple writ petitions raising similar issues and the existence of a pending Supreme Court appeal that challenges the relevant High Court precedents.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Form 'F' and Revision of Returns

The legal framework governing this issue comprises the DVAT Act and the Central Sales Tax (Delhi) Rules, which regulate inter-state trade and commerce transactions and the issuance of statutory forms such as Form 'F'. Form 'F' is essential for claiming concessional tax rates on inter-state sales under the CST regime.

Precedents relied upon include the judgment in M/s Ingram Micro India Pvt. Ltd. v. Commissioner, Department of Trade and Taxes & Anr., where the High Court had earlier ruled on the entitlement to statutory forms and the permissibility of revising returns. However, this judgment is currently stayed by the Supreme Court and under appeal.

The petitioner contended that its failure to include details of inter-state branch transfers in the original returns was inadvertent and that the DVAT Act and Rules permit rectification and issuance of Form 'F' upon revision. The Department rejected the application and refused to allow revision, citing the pendency of Supreme Court appeals and the resultant uncertainty.

The Court examined the relevant statutory provisions and prior decisions of coordinate benches, including GSP Power System Pvt. Ltd. v. Commissioner of Goods and Services Tax Department of Trade and Taxes & Anr., which similarly dealt with rejection of revision requests and issuance of forms. The Court noted that the statutory framework contemplates the possibility of revising returns to correct errors or omissions, and that Form 'F' issuance is a statutory right once the returns are rectified.

Applying the law to the facts, the Court found that the petitioner's request for revision and issuance of Form 'F' was legally sustainable. The petitioner's omission was rectifiable, and the refusal to allow revision was contrary to the statutory scheme.

The Department's competing argument rested on the pendency of Supreme Court appeals and interim stays on related judgments. The Court acknowledged these stays but emphasized that the petitioner should not be unduly prejudiced by procedural delays.

Consequently, the Court permitted the petitioner to file a revised return for the relevant quarter (third quarter of 2018-19) to enable issuance of Form 'F', subject to the condition that this direction would remain suspended pending final adjudication by the Supreme Court in the connected appeals.

Issue 2: Effect of Pending Supreme Court Appeals and Interim Stays

The Court recognized that multiple appeals against the High Court's judgments on similar issues are pending before the Supreme Court, including the appeal in Commissioner Department of Trade and Taxes v. Ingram Micro India Pvt. Ltd. and others. The Supreme Court has granted leave and imposed stays on the operation of these High Court decisions.

The Court noted that these pending proceedings create a complex legal landscape, with several writ petitions raising identical or analogous issues awaiting final resolution. The Department argued that these stays preclude enforcement of the High Court's directions on revision and issuance of forms.

Balancing the interests of justice and procedural propriety, the Court held that while it is appropriate to allow revision and issuance of forms to prevent hardship to petitioners, such directions must be kept in abeyance pending the Supreme Court's ruling. This approach ensures that the parties' rights are preserved without prejudicing the Department or undermining the appellate process.

The Court further directed that competent officials from the Department be present with proper instructions and that a list of similar cases be maintained to facilitate coordinated resolution once the Supreme Court delivers its verdict.

3. SIGNIFICANT HOLDINGS

- "Having heard the counsel for the parties, this Court is of the view that no useful purpose would be served by keeping the petition pending. Consequently, this Court directs the respondent no. 2 to allow the amendment sought by the petitioner in its return of first Quarter for the Financial Year 2017-18. However, this direction shall remain suspended till the Civil Appeals pending before the Supreme Court, taken note of hereinabove, are decided and this direction shall abide by the decision that the Supreme Court renders."

- The Court established that the statutory provisions under the DVAT Act and Central Sales Tax Rules permit revision of returns and issuance of statutory forms such as Form 'F' upon rectification of errors or omissions.

- The Court recognized the binding effect of the Supreme Court's interim orders and appeals, and accordingly suspended its directions pending final adjudication, thereby balancing the petitioner's right to rectify returns with the Department's interest in consistent legal interpretation.

- The Court emphasized the need for administrative cooperation and coordination in resolving multiple pending writ petitions on similar issues, including the presence of competent officials and preparation of case lists.

- The final determination was that the petitioner is entitled to revise its returns and obtain Form 'F' but that such entitlement is subject to suspension until the Supreme Court disposes of the pending appeals, ensuring adherence to the hierarchy of courts and appellate process.