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2015 (11) TMI 1320 - HC - VAT and Sales TaxBenefit of Form ST 35 for the sales made to buyers outside Delhi, which has resulted in enhancement of turnover - Levy of penalty & interest u/s 56 - Reopening of assessment - Held that:- No indication that the amended Form also stood notified in the gazette, what is similar to both cases is that the Department failed to print the amended forms for issuance to the dealers. As has been discussed hereinbefore, a very detailed procedure has been prescribed under Rule 8 of the DST Rules for issuance of the Forms. It is not as if a dealer can simply print out a form and begin using it. The assessing authority has to be satisfied that the purchasing dealer is entitled to such a Form. The Forms are maintained in serial numbers and the assessing authority has to keep a complete record of all the Forms being issued to various dealers. - on the strength of the registration certificate that was still unamended, it was open to the Assessees to make the purchases by using the authorisation under Form ST-37A as it turned out that the amended Forms were issued only with effect from 27th June 2000. Therefore, even if the Assessees had approached their ward authorities to get the Form ST-8 in its amended version (which had replaced Form ST-37A) such amended Forms would in fact have not been available. There was not even any press note, circular or notification issued to the dealers about the availability of such amended ST-8 Forms. This was not a case of making a false declaration. The Appellants were issued Form ST-35 and ST-35/1 and declarations were given in both forms, which at the time of making of these declarations, could not be held to be false declarations. Another decision which is relevant in this context is MMTC v. State of Orissa [1986 (1) TMI 377 - ORISSA HIGH COURT] where again it was observed that when the Form is not amended by the time of furnishing the declaration it was impossible on the part of the Assessee to furnish a declaration in the amended Form. - Clause 7A refers to Rule 23A(2) which provides that where a dealer purchases goods on the strength of the registration certificate issued under Rule 16 and against Form ST-35(1) but utilises such goods not by way of sale but for a purpose other than that mentioned in Rule 11(XXXIVA) then the purchase price would be included in his taxable turnover. However, Rule 23A(2) itself is not applicable because the condition laid down for its applicability did not exist. In other words, with Form ST-37A not being formally withdrawn and in fact the authorisation being continued to be issued, it was impossible for the dealers to comply with the requirement of the amended provisions and on the one hand with the department issuing the old unamended Forms, the dealers could not be faulted for making declarations in the unamended Forms. Majority opinion was in error in upholding the levy of interest and penalty under Section 56 of the DST Act. In this context, reference made to the decision of the Supreme Court in J.K. Synthetics Ltd and Birla Cement Works v. Commercial Taxes Officer and State of Rajasthan [1994 (5) TMI 233 - SUPREME COURT] which holds that if the original assessment is accepted and the dealer has paid tax in terms of that return, the levy of interest will not be justified. The levy of penalty was in any event not justified. The imposition of penalty is not automatic even assuming that the reassessment was justified. The fact that there was a dissenting opinion by one of the Members of the Tribunal, does indicate that it is not a case of concealment of particulars but a case where there is a possible interpretation in favour of the Assessee. Assessing authority was seeking to do by invoking Section 24 of the DST Act was to review the earlier order passed by him earlier after having realised that the Assessees ought not to have furnished the declarations under the unamended Forms in ST-35 in respect of the inter-state sales. There is a distinction between the reopening of an assessment under Section 24 of the DST Act and the exercise of revisionary powers by a superior officer under Section 46 of the Act. Thus a Commissioner could form the opinion that the order of an assessing authority is prejudicial to the interests of the Department. In other words, Section 24 cannot substitute for the power exercisable under Section 46 of the Act. A mistake in the original assessment will not by itself constitute a justification for reopening of the assessment particularly where all the material facts were already known to the assessing authority. Secondly, the statutory requirement of recording the formation of an opinion about turnover escaping assessment by the tax by the assessing authority is mandatory. Thirdly, the question whether there was ground for reopening the assessment is not a matter for inference reference. There is a mandatory requirement that there must be a written note on the file by the assessing authority recording satisfaction that there existed grounds for reopening the assessment within the meaning of Section 24 of the DST Act. This again cannot be a mechanical reproduction of the provision. If there is no such recording of satisfaction by the assessing authority, the inevitable result is invalidation of the entire reassessment proceedings. - Decided in favour of assessee,
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