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MRF Ltd. Versus The Commercial Tax Officer - (IAC-I) , Commercial Taxes Department, Puducherry

2015 (8) TMI 684 - MADRAS HIGH COURT

Submission of Statutory Declaration forms – Uploading declaration in electronic format – Assesse aggrieved by assessment order passed by competent authority on ground that they have not submitted part of declaration forms as required under law therefore, impugned order proposed to demand differential tax – Whether there was failure on part of Petitioners to submit statutory declaration forms and had violated provision of law – Held that:- Sections 6A and 8(4) of Central Sales Tax Act, 1956 provi .....

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as not in dispute that each of assesse have already submitted their original declaration forms before Assessing Authority, he was bound to take same for completing assessment without insisting on uploading declaration forms in electronic format – Petitions allowed and impugned orders set aside – Decided in favour of Assesse. - Writ Petition Nos. 7260, 6466, 8450, 8451, 6615, 9112, 9113, 7294, 7716 and 7717 of 2015 - Dated:- 25-6-2015 - R. Sudhakar And K. B. K. Vasuki, JJ. For the Appellant : Mr. .....

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sed by the competent authority on the ground that they have not submitted a part of declaration forms as required under law. Therefore, the impugned order proposed to demand differential tax. Each one of the petitioner/assessee are concerned with different types of declaration forms, but that has no consequence for the disposal of the present Writ Petitions, as we are concerned with the core issue as to whether there was a failure on the part of the Writ Petitioners to submit the statutory decla .....

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e country. The petitioner has been filing monthly VAT returns under the Puducherry VAT Act, 2007 and the Rules in Form I as prescribed under Rule 5(1) of the Central Sales Tax (Pondichery) Rules, 1967. There is no dispute on these facts. Insofar as the present case is concerned, on 10.12.2014, the Commercial Tax Officer issued a notice in the following manner: "Take notice that, as per the Rule 52 read with Section 54 of the PVAT Act, 2007, you have to the file "Form CC" before 30 .....

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aration forms as the concessions/exemptions claimed are subject to production of Form C/F/H, as the case may be, under Rule 12(7) of the CST (Registration and Turnover) Rules, 1957. While issuing notice, the Authority invoked the provisions of Rule 12(7) of the Central Sales Tax Rules. Rule 12(7) and the proviso to the said Rule reads as follows: "12.(7) The declaration in Form C or Form F or the certificate in Form E-I or Form E-II shall be furnished to the prescribed authority with in thr .....

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s despite lapse of time as mentioned in Rule 12(7), the Commercial Tax Officer proposed to reject the claim of concession/exemption and assess the turnover on higher rate of duty as applicable. It is pertinent to point out at this point of time that in this notice a specific direction was issued to the dealers to file the documents in support of the monthly returns filed. They were given time upto 19.2.2015 to submit relevant records and their objections, if any, on or before 19th February, 2015 .....

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out hereunder the details of the reply dated 19.2.2015 submitted by the assessee: ".... with the above network, we hope the department will understand the hardships being faced in collecting C-Forms and F-Forms. We have been making our regular and continuous efforts in collecting the Forms and reconciling the forms with our voluminous transactions. With great efforts, we have collected most of the Forms as per our reported turnover and ready to submit to the department. As a unique practice .....

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ess is time consuming due to huge volume of data and dependability on unrestricted internet access. Inspite of putting one dedicated person exclusively on this job for the whole working day, the process is likely to take more weeks, as, the Department is expecting to do the uploading from the inception of VAT regime till date. Due to the special nature of work and expected level of accuracy, we are unable to outsource the job. Even if one Form is missing, it will have huge impact for us. We requ .....

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ompletion. As of now, we are ready to submit manual Forms on the advice of the Department." (emphasis supplied) 8. It was highlighted in the above letter that the assessee was ready to submit manual declaration forms on the advice of the Department. The Officer, in the said letter endorsed that as a final opportunity, time granted upto 24.2.2015. On 20.2.2015, the assessee again sent a letter to the Commissioner, Commercial Taxes Department, which was acknowledged by the Department, stating .....

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007-08 and onwards. We are facing lot of difficulties in uploading the details. The server is also very slow. Many times network issue is there. For uploading details in the system, it is taking unreasonably longer time. We have already uploaded the details of statutory forms for the Financial Year 2010-11. We are in the process of uploading the details for the financial year 2011-12 and remaining years. Further we request that this is a new system introduced by the department and it is taking u .....

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ed. Considering the time required to upload the details in the server for each financial year we request you to give at least 3 months time to complete the details as per the requirement of the department. Alternatively we may be allowed to submit the original forms with statutory form details manually. Hence, we kindly appeal to our Hon'ble Authority to grant an extension of minimum 3 months time to complete the job. We assure to put all round efforts to expedite the job, to ensure early co .....

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e documents are voluminous. Thereafter, on 23.2.2015, they submitted a letter stating that physical C and F forms, without uploading (for assessment years 2008-09 to 2013-14), would be handed over. The note appended to the said letter reads as follows: "Physical C Forms & F Forms, without uploading (for AY 2008-09 to 2013-14) will be handed over, on hearing from you. Indly held & do the needful." 10. This letter was followed by another letter dated 23.2.2015 requesting the auth .....

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lows: "The dealer was requested by this office notice dated 10/12/2014, 22/01/2015 to file the required declaration forms, but the dealer has not filed the forms. Hence, a Final Notice issued on 10/02/2015 for submission of Forms/objections and time given upto 19/02/2015, for which the dealer has requested 6 months extension of time. However time has been granted upto 24/02/2015 as a final opportunity as per the request letter dated 19/02/2015 submitted by the dealer. But the dealer has not .....

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impugned order, it appears that the entire case proceeded on the basis that no statutory declaration forms were submitted by the Writ Petitioner/assessee on the date of assessment. Fortunately, for the Writ Petitioner in W.P.No.7260 of 2015, the counter affidavit filed by the Department comes in aid, which states the contrary. The relevant portion of the said counter reads as follows: "16. I submit that in order to assess the CST turnover for the assessment year 2010-11, the respondent her .....

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ce to the petitioner with instructions to submit the delcaration forms on or before 19.2.2015 failing which order will be passed accordingly and no further extension of time will be considered. However, the petitioner has again leniently sought for another six months time vide letter dated 19.2.2015 to furnish the requisite declaration forms. However, the respondent in the above said letter itself has mentioned that final opportunity to furnish the declaration forms and granted time upto 24.2.20 .....

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e respondent had no other alternative but for concluding the assessment and passing final assessment order on 24.2.2015. The same was duly served only on 25-02-2015. Therefore, the contention made by the petitioner that the respondent did not even wait till the expiry of the time alone is not correct and unsustainable." (emphasis supplied) 13. Aggrieved by the above-said impugned order, the assessee is before this Court. 14. This now leads to the core issue as to whether the Authority could .....

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ssing Authority within the prescribed time. He further submits Section 13 relates to power of the Central Government to make rules, more particularly Section 13(1)(d), which provides the manner in which the declaration forms may be produced or furnished. Section 13(3) and (4) enables the State Government to make rules not inconsistent with the provisions of the Act. 16. He also submits that these Sections also speak about the declaration forms should be maintained and furnished. Rule 12(7) of th .....

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les or in the Central Sales Tax Rules, the insistence by the Department that all these declaration forms should be uploaded online is an onerous condition, not required by law and as and when the original declaration forms are submitted at the time of assessment, they refused to accept such forms, despite the data already uploaded as required by the Department. Hence, the impugned order issued declining to extend the exemption/concession only on the ground that the dealer failed to submit the de .....

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ails of 'C' forms in support of the invoices, the Department is willing to accept the same and proceed with the assessment on the basis of the 'C' Forms submitted in physical form at the time of assessment. 18. Heard learned Senior Counsel appearing for the petitioner and the learned Special Government Pleader (Pondy) appearing for the respondent and perused the materials placed before this Court. 19. Before going into the merits of the case, necessary provisions relating to the .....

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the case may be, and not by reason of sale, the burden of proving that the movement of those goods was so occasioned shall be on that dealer and for this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business, or his agent or principal, as the case may be, containing the prescribed particulars in the .....

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of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to that effect and thereupon the movement of goods to which the declaration relates shall be deemed for the purpose of this Act to have been occasioned otherwise than as a result of sale. Explanation: In this section 'assessing authority', in relation to a dealer, means the authority for the time being competent to assess the tax payable by the dealer under this Act. (3) Nothing cont .....

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o a registered dealer goods of the description referred to in sub-section(3); shall be liable to pay tax under this Act, which shall be three per cent, of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the Sales Tax Law of that State, whichever is lower; (2)......... (3)........ (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 furnis .....

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Rules providing for - (a)..... (b).... (c).... (d) the form in which and the particulars to be contained in any declaration or certificate to be given under this Act 2[ the state of origin of such form or certificate and the time within which any such certificate or declaration shall be produced or furnished; ..... (2)...... (3) The State Government may make Rules, not inconsistent with the provisions of this Act and the Rules made under sub-section (1), to carry out the purposes of this Act. (4 .....

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ch any deficiency may be made up under subsection (3-E) of that section; (b) the form and manner in which accounts relating to sales in the course of inter-State trade or commerce shall be kept by registered dealers. (c) the furnishing of any information relating to the stocks of goods of purchases, sales and delivers of goods by, any dealer or any other information relating to his business as may be necessary for the purposes of this Act; (d) the inspection of any books; accounts or documents r .....

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b-section (1) of section 6-A or subsection (4) of section 8 may be obtained, the manner in which such forms shall be kept in custody and records relating there to maintained and the manner in which any such form may be used and any such certificate or declaration may be furnished; (ee) the form and manner in which, and the authority to whom, an appeal may be preferred under sub-section[3-H] of section 7, the procedure to be followed in hearing such appeals and the fees payable in respect of such .....

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om any change in the ownership of any business or in the name, place or nature of any business carried on by any dealer shall be furnished. Rule 5(1) and 14(4) of the Central Sales Tax (Pondicherry) rules, 1967: 5.(1) Every dealer other than those specified in the proviso to Rule 11 of the Central Sales Tax (Registration and Turnover) Rules, 1957, registered under section 7 of the Act, shall submit a return of his transactions in the course of interstate trade or commerce or in the course of exp .....

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he Act." 14. (4) Notwithstanding anything contained in the foregoing and in sub-rules(1) and (2) of rule 5, the selling dealer may, instead of attaching the form of declaration to the return in Form 1, keep it in his custody subject to the condition that he maintains a register in Form 9 showing serially and chronologically the receipt of the forms of declaration from the purchasing dealers and submits all the forms of declaration relating to the year at any time before the final assessment .....

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Sales Tax Registration and Turnover (Amendment) Rules, 1974, or before the commencement of the Central Sales Tax Registration and Turnover (Amendment) Rules, 1976, may also be used up to the 31st December, 17[31st December, 1979], with suitable modifications: ....... (5) The declaration referred to in sub-section (1) of Section 6- A shall be in Form F ....... (7) The declaration in Form C or Form F or the certificate in Form E-I or Form E-II shall be furnished to the prescribed authority with i .....

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des that the assessee should furnish the declaration within the prescribed time. The proviso to Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 provides that if the prescribed authority is satisfied with the sufficient cause shown by the assessee, he may allow the assessee to furnish the declaration within such further time. Rule 14(4) of the Central Sales Tax (Pondicherry) Rules, 1967 provides that the assessee can submit all the forms of declaration relating to the .....

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ily on the ground that the voluminous records make it difficult for them to upload the details required by the Department and further the server does not provide for effective and speedy uploading of data. This has been the consistent stand of each one of the Writ Petitioners in their representations and letters addressed to the Department. The bone of contention of the petitioners is that the declaration forms submitted in its original form have not been accepted by the Department in many cases .....

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as both on fact and law, we find that the impugned orders have been passed on the misconception of the provisions as mentioned above. When there is no specific indication in the Central Sales Tax Act or the Puducherry Value Added Tax Rules to provide the declaration forms in electronic form, we fail to understand that for the convenience of the Department how the assessee could be made to suffer. The fact that the declaration forms were submitted, but not accepted by the Department for the afore .....

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such purpose. It is stated by the Officers instructing the learned Special Government Pleader that they are in the process of preparing the Rules for the purpose of change over to electronic form and it should be issued shortly. They further states that if the assessees have uploaded the data sheets containing details of the 'C' forms in support of the invoices, which assessees are wiling to do voluntarily, the Department is willing to accept the same and proceed with the assessment on .....

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thority, he is bound to take the same for completing the assessment without insisting on uploading the declaration forms in electronic format. 26. Assuming there is a delay, we find no reason why it should not be condoned in the light of the decision in the case of State Of H.P. and others vs Gujarat Ambuja Cement Ltd. and another reported in 142 STC 1 (SC), wherein the Supreme Court while dealing with the belated filing of statutory forms held as follows: "It was urged on behalf of the app .....

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It is to be noted that under Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 (in short the Registration Rules') the declaration form can be filed at a subsequent point of time and not necessarily along with returns. On an application being made before the Assessing Officer the exemption can be granted. The object of the Rule is to ensure that the assessee is not denied a benefit which is available to it under law on a technical plea. The Assessing Officer is empow .....

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d. It can also be accepted as additional evidence in support of the claim for deduction. In the instant case, respondent No.1-company made a specific request before the revisional authority which was turned down. Therefore, the question of any non-compliance with the relevant statutes does not arise. It was noted by this Court in Sahney Steel and Press Works Ltd. and Anr. v. Commercial Tax Officer and Ors., [1985] 4 SCC 173 that even in a given case, an assessee can be given an opportunity to co .....

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