TMI Blog2008 (8) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicated by this court in exercise of its writ jurisdiction. Hence, the Revenue authorities may proceed with the assessment after affording reasonable opportunity of hearing to the petitioner and confronting it with the materials collected against it that the goods dealt with by it are manufactured in the State of Orissa. The petitioner shall also have right to adduce evidence in support of its contention that goods dealt with by him are neither produced nor manufactured inside the State of Orissa. However, it is made clear that the Revenue authorities, in the circumstances of the case, cannot suspend the registration certificate of the petitioner. Applications of the petitioner for supply of declaration in forms "C" be considered and dispose of in accordance with law without any delay. - W.P. (C) No. 10841 of 2008 - - - Dated:- 12-8-2008 - CHAUHAN B.S. C.J. DR. AND MAHAPATRA B.N. , JJ. B.N. MAHAPATRA J. The grievance of the petitioner is that the Commercial Tax Officer, Sambalpur-I Circle, Sambalpur-O.P. No. 3 (hereinafter referred to as, the CTO ) and Sales Tax Officer, Ward D, Sambalpur I Circle, Sambalpur-O.P. No. 4 (hereinafter referred to as the STO ) have ille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to consider issue of four sheets of C forms. On the same day, CTO-O.P. No. 3 directed to assess the petitioner provisionally and to inform the Assistant Commissioner of Sales Tax (hereinafter referred to as, the ACST ) to suspend the registration certificate of the petitioner for non-payment of entry tax. Further direction was given to issue only two sheets of C form. On June 7, 2008, the petitioner wrote a letter vide annexure 5 to the STO for supply of balance 23 sheets of C forms disclosing details of its requirement. On June 10, 2008, the STO sought clarification from the ACST regarding payment of Orissa entry tax. Mr. S.C. Lal, learned counsel appearing on behalf of the petitioner, vehemently argued that the petitioner being a registered dealer is entitled to purchase goods at concessional rate of tax by furnishing C forms to the outside State registered dealer. The C forms are secured documents and are supplied by opposite parties 3 and 4, after a utilisation account of last supplied C form is furnished by the dealer. He submitted that as required under rule 6 of the Central Sales Tax (Orissa) Rules, 1957 [hereinafter referred to as, the CST (O) Rules], th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory forms like declaration in forms C and F , way-bill, etc. Per contra, learned counsel appearing on behalf of the Revenue submitted that in order to prevent misuse of C forms, the STO is justified to regulate the supply of the same. He further submitted that on enquiry it was found that the goods dealt with by the petitioner are manufactured in the State of Orissa, and, therefore, the petitioner is liable to pay the entry tax and if the petitioner does not pay the entry tax opposite parties 3 and 4 are justified in their action in not issuing the declaration form C . On rival contentions of the respective parties, the following questions fall for consideration by this court: (i) Whether, on the facts and circumstances of the case, a dealer registered under the CST Act is entitled to get adequate number of C forms, as per his requirement, to purchase goods from outside the State to avail concessional rate of tax as provided under section 8 of the Act read with rule 12 of the CST (R T) Rules and the same cannot be refused on any ground other than those stipulated in rule 6 of the CST (O) Rules? (ii) Whether, on the facts and circumstances of the case, the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in the telecommunications network or in mining or in the generation or distribution of electricity or any other form of power; (c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c). (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner, (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the buying dealer in order to pay concessional rate of tax to the selling dealer must have to furnish declaration in form C to the selling dealer. This form he has to obtain from the prescribed authority who shall supply the same to a registered dealer as provided in rule 12 of the CST (R T) Rules. The relevant provision of rule 12 of the CST (R T) Rules is reproduced below: 12(1). The declaration and the certificate referred to in sub-section (4) of section 8 shall be in forms 'C' and 'D', respectively: . . . . Rule 6 of the CST (O) Rules deals with authority from which declaration forms may be obtained, use, custody and maintenance of records of such forms and matters incidental thereto. The relevant provisions of rule 6 of the CST (O) Rules is reproduced below: 6. Authority from which declaration forms may be obtained, use, custody and maintenance of records of such forms and matters incidental thereto. (a)(i) A registered dealer, who wishes to purchase goods from another such dealer on payment of tax at the rate applicable under the Act to sales of goods by one registered dealer to another, for the purchase specified in the purchasing de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn the return under rule 11. Under the provisions of section 8(1) of the CST Act read with rule 8(4), a registered dealer has a right to obtain declaration form from the prescribed authority in order to avail concession in payment of tax on inter-State transactions. Neither section 8 of the Act nor rule 12 imposes any restriction on 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 penalty. It is only rule 6 of the CST (O) Rules which imposes certain restriction on supply of C declaration form. A coherent reading of section 8 of the Act, rule 12 of the CST (R T) Rules and rule 6 of the CST (O) Rules, makes it amply clear that once a dealer satisfies the conditions that he is a registered dealer authorised to purchase goods mentioned in the certificate of registration and charges for obtaining C forms were paid and a true copy of the accounts of the forms last supplied was furnished, the authorities are bound to issue him C form and the same cannot be refused on any ground other than those stipulated in rule 6 of the CST (O) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Industries Limited v. State of Orissa [2008] 16 VST 85) disposed of on February 18, 2008 held in such an event no entry tax is leviable. In his explanation dated April 24, 2008 (annexure 2) the petitioner explained as follows: We have not paid the entry tax because of the decision of the honourable High Court dated February 18, 2008 in the case W.P. (C) No. 6515 of 2006 (Reliance Industries Limited v. State of Orissa [2008] 16 VST 85). The goods brought by me are not produced or manufactured in the State of Orissa. Rule 6 of the CST (O) Rules provides for payment of Rs. 21 for 25 numbers of blank declaration C forms. From the said provision it appears that usually a registered dealer is entitled to get twenty-five copies of blank C forms on payment of Rs. 21 in the shape of court fee at a time provided he furnishes a true copy of the account of C forms last supplied. If a registered dealer satisfies the notified authority about the requirement of more number of blank C forms which is very often necessary in case of big business houses, the assessing officer shall issue such more number of blank C declaration forms after being satisfied about such requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t registered dealers are prevented from carrying on their business smoothly as the selling registered dealers of outside the State express their reluctance for selling goods to the registered dealers of the State at a concessional rate of tax as they do not get C forms in time. It is a matter of grave concern. A State cannot financially develop unless its trade and commerce flourish. This should be kept in the mind of the Revenue authorities. Every citizen of the country has a fundamental right to carry on business. It does not depend upon the hims and caprice of the Revenue authorities. The Revenue authorities must see that there is flourishment of trade and commerce in the State so as to enrich the State exchequer. In this context, it may be necessary to know the background in which the provisions under the Central Sales Tax Act and Rules have been made to enable a registered dealer of one State to purchase goods at a concessional rate from the dealers of other States on the strength of C declaration forms. The historic background leading to the enactment of section 8 as recommended by the Taxation Enquiry Commission [Report of the Taxation Enquiry Commission (1953-54); Vol. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that Government, Central or State, cannot be permitted to play dirty games with the citizens of this country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the Government, the Government should take appropriate steps, but it should not take extra-legal steps or adopt the course of manoeuvring. Because of the above discontentment expressed by the Bar it has become necessary to provide guidelines for just exercise of the power of Revenue authorities. To prevent the abuse of power and to see that it does not become a new despotism, courts are gradually evolving the principles to be observed while exercising such power. New problems call for new solutions. The revenue officers, who are responsible to issue declaration form C , form F and way-bills, etc., to the registered dealers must see that the adequate numbers of statutory forms should be issued to a registered dealer at a time without any delay provided the required fees and others conditions are fulfilled. In case any deviation is intended to issue a less number of statutory forms, he must record the reason for such deviation and should immediately intimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of juridical discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not 'acceptable' to the department in itself an objectionable phrase and is the subjectmatter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. Therefore, the judgment of this court passed in W.P. (C) No. 6515 of 2006 [Reliance Industries Limited v. State of Orissa [2008] 16 VST 85] disposed of on February 18, 2008 is binding on all parties while special leave petition against the said judgment has been admitted in the apex court and is pending disposal. The petitioner in the instant case has not paid the entry tax on the goods purchased from outside State on the ground that those goods are not produced and manufactured inside the State. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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