TMI Blog2010 (9) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... gnify that form ST-3 has to be produced in original. No doubt, when these original forms ST-3 are lost or destroyed because of the circumstances beyond the control of the assessee, he should not be punished and denied the benefit. The rule-making authority has taken care of such a situation, so that no unnecessary hardship is caused. Sub-rule (3) is specifically added to take care of these circumstances. Sub-rule (3) is an exception and if the circumstances contained therein exist, the Commissioner can exempt a dealer from furnishing original ST-3 from. However, for doing so the conditions laid down therein are to be satisfied, which are specifically incorporated in the provision. To avail of the benefit, the dealer has to necessarily seek exemption in the manner provided therein. Appeal dismissed. - S.T. Appeal No. 4 of 2010 - - - Dated:- 14-9-2010 - SIKRI A.K. AND REVA KHETRAPAL , JJ. The judgment of the court was delivered by A.K. SIKRI J. This second appeal has been filed by the appellant (hereinafter referred to as, the assessee ) under section 45 of the Delhi Sales Tax Act, 1975. The appellant feels aggrieved by the order dated April 1, 2010 passed by the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order before the first appellate authority along with the stay application. In the said stay application, the first appellate authority passed the orders dated March 29, 2000 directing the assessee to deposit entire amount of tax as a condition of hearing the appeal. In appeal, this order was modified by the Tribunal on January 31, 2001 directing the assessee to deposit Rs. 10 lacs under the local Act and Rs. 19,000 under the Central Act. Still not satisfied, the assessee challenged that order by filing Writ Petition No. 7171 in this court. This writ petition was decided on January 17, 2002 whereby order of the Tribunal was further modified allowing the assessee to now deposit Rs. 1,00,000 under the local and Rs. 50,000 under the Central Act. The appeal was ultimately heard by the first appellate authority (i.e., Additional Commissioner) who vide orders dated March 27, 2003 remanded the case back to the assessing authority for passing fresh orders after providing an opportunity to the assessee. At this stage, we may state that the entire controversy relates to the payment of sales tax on the sales made by the assessee. As pointed out above, the items in which the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst appellate authority, i.e., Additional Commissioner and was disposed of vide orders dated May 29, 2009. The assessee was given part relief. However, as the assessee again failed to produce the original invoices or books of account, which were purportedly lost, it was ready to produce the photocopy of those bills which he allegedly collected from the dealers. The first appellate authority observed that it was for the assessee to submit proof to the satisfaction of the assessing officer that the sale made by it was not liable to be taxed. The first appellate authority also observed that as far as enhancement of sale was made by the assessing officer, no reasons in support thereof are given. The first appellate authority again remanded the case back to the assessing officer with the direction to assess the turnover on the basis of available records and pass speaking order for any enhancement of sale. Since the first appellate authority had observed in the impugned order that the assessee was not entitled to get the relief in the absence of original invoices and on the basis of photocopy of the invoices, the assessee took the same as an order adverse to it as it was not in a posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the sales tax. Thus, it could clearly be inferred and implied that due sales tax was paid by the assessee. In such circumstances, there was no question of any liability to pay sales tax again when the sales were made by the assessee to the ultimate consumers. Though, it was conceded that in order to avail of this benefit, it was necessary for the assessee to produce the books of account and the purchase invoices showing sales tax charged by the dealers from the assessee at the time of making first sale to it, his grievance was that the authorities below failed to appreciate that when the books of account had been lost, the assessee had no alternative but to produce the photocopies of the purchase invoices which the assessee had collected from the dealers. He submitted that loss of books of account, etc., took place in September, 2001 and FIR was lodged in that behalf as these books of account were available earlier, he had shown the same to the Additional Commissioner (the first appellate authority) when in the first round of appeal before the said authority, the assessee had pressed its application for stay. This contention of the assessee is noted by the said authority in its o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce bill(s)/cash memo(s) in support of purchase of such goods in Delhi. Photocopies of such bills are available with the appellant which are produced before this court. Such purchases stand confirmed from the sellers either by stamping the invoices or supported with their letters. These have been recorded in the books of account and payments too have been made by cheques. He further tried to distinguish the judgment of the Supreme Court in the case of India Agencies (Regd.), Bangalore v. Additional Commissioner of Commercial Taxes, Bangalore [2005] 139 STC 329 relied upon by the Tribunal. In support of his submission that when the original copies of the cash memos/books of account had been lost, non-production thereof would not attract denial of the benefit when the payment of taxes at first point or purchases from registered dealer had not been disputed and referred to the following judgment in support of this plea: (a) CCE, Ludhiana v. Ralson India Ltd. [2006] 202 ELT 759 (P H). (b) CCE v. Stelko Strips Ltd. [2010] 255 ELT 397 (P H) and (c) Kothari General Foods Corpn. Ltd. v. CCE, Bangalore [2002] 144 ELT 338 (Tri-Bang). Mr. Taneja, learned counsel appearing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was allowed holding that the assessing authorities should not have rejected the duplicate of the C forms and the indemnity bonds filed by the appellant and should not have denied the benefit of concessional rate of tax on such turnover covered by duplicate C forms. The Revenue preferred appeal thereagainst before the Additional Commissioner of Commercial Taxes, who allowed the appeal by setting aside the order of the Joint Commissioner of Commercial Taxes (Appeals) to the extent that it allowed concessional rate of tax on the inter-State sales effected by the controller on the basis of the C forms marked as duplicate and the indemnity bonds furnished by the dealer for the loss of the C forms marked as original. The appellant/assessee approached the High Court of Karnataka by filing the Sales Tax Appeal No. 75 of 1998, which was dismissed. In these circumstances, the appellant knocked the door of the Supreme Court. It was the contention of the appellant before the Supreme Court that as original C form had been lost, it was permissible for the appellant to produce duplicate C forms, which was also primary evidence of the said document by virtue of the principles enshrined in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, as the case may be, on all the three portions of such form or certificate. The court also took note of rule 6 of the Central Sales Tax (Karnataka) Rules, 1957. Clause (ii) of sub-rule (ii) thereof is relevant and reads as under: (ii) A registered dealer who claims to have made a sale to another registered dealer or to Government shall, in respect of such claim, attach to his return to be filled in form IV the portion marked 'original' of the declaration or the certificate in form D received by him from the purchasing dealer or Government, as the case may. The assessing authority may in his discretion, also direct the selling dealer to produce for inspection the portion marked 'duplicate' of the declaration or certificate in form D, as the case may be. On the basis of the aforesaid provisions, the apex court came to the conclusion that merely by producing duplicate C form instead of original forms, the appellant had not complied with the provision of section 8(4) to enable it to claim the benefit of concessional rates. It observed: 12. . . . In our view, the rule has to be strictly construed. Admittedly, the appellant has not complied with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only by the sales tax authorities of concerned States. By issuing declaration in C form the purchasing dealer would be benefited as he is entitled to purchase goods by paying only concessional rate of tax of four per cent as prescribed by the concerned State of purchasing dealer otherwise the purchasing dealer has to pay tax at a higher rate besides additional taxes on such sales effected within the State where selling dealer is situated. The Supreme Court also discussed various precedents and entire discussion thereon would be relevant for us. Therefore, we reproduce the same (at page 343 of 139 STC): 18. In Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer, Calcutta [1965] 16 STC 607 (SC); [1965] 3 SCR 626, the question that arose in this case was whether under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, the furnishing of declaration forms issued by the purchasing dealers was a condition for claiming the exemption thereunder. This court held as under: 'Section 5(2)(a)(ii) of the Act in effect exempts a specified turnover of a dealer from sales tax. The provision prescribing the exemption shall, therefore, be strictly construed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubtedly empowered to make rules under sub-sections (3) and (4) of section 13; but the rules made by the State Government must not be inconsistent with the provisions of the Act and the Rules made under sub-section (1) of section 13 to carry out the purposes of the Act.' 20.. In a similar matter Commissioner of Sales Tax, Delhi v. Delhi Automobiles (P.) Ltd. [1981] 48 STC 333, the Delhi High Court held that the production of a declaration form is a condition precedent for the availability of the concession. The Bench also has observed that these detailed provisions are intended as a measure of safeguard against possible miss-utilization of the forms and also to ensure that relief is not obtained by more than one selling dealer in respect of the same declaration form by using the various parts of it differently. 21.. This court has further held that the essence of these rules and regulations is that before a selling dealer is able to claim the benefit of concessional tax he should be able to produce the original and duplicate issued to him by the purchasing dealer in the first instance or the duplicate which will also contain these two portions of the forms issued along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case on hand, namely, rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957 that makes of the difference for it is the rule 6(b)(ii) imposes the condition in the instant case. 24.. Against the decision in Commissioner of Sales Tax, Delhi v. Delhi Automobiles (P.) Ltd. [1981] 48 STC 333 of the High Court of Delhi, the Delhi Automobiles (P) Ltd. preferred an appeal in this court Delhi Automobiles P. Ltd. v. Commissioner of Sales Tax, Delhi [1997] 104 STC 75 (SC); [1997] 10 SCC 486, which was dismissed by this court. The learned judges of this court has observed in para 7 as under: 'In our view, in the first place, the assessee had not done all that it could; it could, and should, have preferred an appeal against the order of the learned single judge and persisted in his application for obtaining from the official liquidator duplicates of the C form declarations, as required by rule 12(3). Since it did not, in the face of the clear language of the rule, its case can hardly be said to be a hard case. The judgment cited by the learned counsel has no application because that was a case where the language of the statute was found to be ambiguous. The language of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended accordingly: Provided further that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interests of any dealer: Provided also that in respect of any goods or class of goods the Administrator is of opinion that it is expedient in the interest of the general public so to do, he may, with the previous approval of the Central Government and by notification in the official gazette, direct that tax in respect of taxable turnover of such goods or class of goods shall, subject to such conditions as may be specified, be levied at such modified rate not exceeding the rate applicable under this section, as may be specified in the notification. (2) For the purposes of this Act, 'taxable turnover' means that part of a dealer's turnover during the prescribed period in any year which remains after deducting therefrom, (a) his turnover during that period on (i) sale of goods, the point of sale at which such goods shall be taxable is specified by the Administrator under section 5 and in respect of which due tax is shown to the satisfaction of the Commissioner to have been paid; (ii) sale of goods d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to in sub-clause (v) shall be allowed unless a true declaration duly filled and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable from the prescribed authority in the manner and subject to such condition as may be prescribed manner and within the prescribed time, by the dealer who sells the goods: Provided also that where any goods are purchased by a registered dealer for any of the purposes mentioned in sub-clause (v), but are not so utilised by him, the price of the goods so purchased shall be allowed to be deducted from the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer; and (b) the tax collected by the dealer under this Act as such and shown separately in cash memoranda or bills, as the case may be. 5.. Power of Administrator to prescribe points at which goods way be taxed. Notwithstanding anything contained in the Act, Lieutenant Governor may, by notification in the official gazette and subject to such conditions, if any, as may be specified therein, specify the point of sale at which any goods or class of goods may be taxed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made by a dealer and after making such enquiries as he may consider necessary, is satisfied that the dealer is not in a position to furnish all or any of the declarations referred to in sub-rule (1) above on account of loss of such declaration or declarations due to the fire or flood or riots beyond the control of the dealer, and that the application of sub-rule (1) will cause undue hardship to the dealer, he may by an order in writing exempt such dealer from furnishing such declaration or declarations, subject to the conditions as are hereinbelow mentioned and to such further conditions as may be specified by the Commissioner in the order. CONDITIONS (1) That the application is made within 30 days of the event, i.e., fire or flood or riots, as the case may be, stating the fact and circumstances in which the loss took place and also shall state the evidence on which he relies in support of such facts. The application shall be duly signed and verified by the dealer in the manner as is provided in respect of returns. (2) That the loss had taken place at the place of business of the dealer. (3) The provisions of sub-rule (3) of rule 7, shall mutatis mutandis apply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions laid down therein are to be satisfied, which are specifically incorporated in the provision. To avail of the benefit, the dealer has to necessarily seek exemption in the manner provided therein. It has to be in the following manner: (1) The application is to be made by the dealer within 30 days of the occurrence of any event specified in the sub-rule. (2) In this application, the dealer is to state the facts and circumstances in which the loss took place. (3) The dealer has also to state in the application the evidence on which he would rely in the absence of original documents. (4) On making this application, the Commissioner shall make appropriate inquiry to satisfy himself that the dealer is not in a position to furnish all or any of the declarations referred to in sub-rule (1). (5) He shall also be convinced that cause of non-supply of those documents shall cause undue hardship to the dealer. It would be one of the exercises, exercise in the process, that the other evidence, which is relied upon by the dealer in the absence of original evidence, is sufficient to show that the tax has been paid at the first point and the dealer is entitled to adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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