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DCW Ltd. Versus The Commissioner of Trade And Taxes, Delhi

2016 (12) TMI 465 - DELHI HIGH COURT

Benefit of Form ST-1 - Did the Appellate Tribunal fall into error in holding that the ST-1 forms used by the assessee were invalid and therefore could not be the basis of any benefit? - Held that: - From a combined reading of the Form and the Rules, it is quite evident that the declaration per se does not contain any provision limiting the date or dates or time period for which it is valid. All that proviso to Rule 7(1) of the Rules requires is that if transactions are concerned with the deliver .....

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orm, therefore, could not have bound either the selling or the purchasing dealer in the circumstances of this case - It is further reaffirmed by Rule 8(9) of the Rules which specifically states that a registered dealer is bound to surrender to the appropriate Assessing Authority all unused declaration forms remaining in hand upon cancellation of his certificate. Thus, Forms once issued per se have validity in terms of the Rules. - The rejection of the Forms in the present case and claimi .....

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nding Counsel for Govt. of NCT of Delhi and Ms. Rakhi Singhal, Advocate ORDER S. Ravindra Bhat, J. ( Oral ) 1. The question of law framed on 04.10.2016 is as follows:- "Did the Appellate Tribunal fall into error in holding that the ST-1 forms used by the assessee were invalid and therefore could not be the basis of any benefit?" 2. The assessee/appellant, a registered Sales Tax dealer in Delhi, had entered into a transaction for purchase of goods, i.e., PVC resins. It sought to inter a .....

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ly entertained when a direction to pre-deposit ₹ 3,00,000/- and waiving the rest was made. Subsequently, by the impugned order dated 25.06.2014, the Tribunal dismissed the appeal and upheld the demand for ₹ 1,41,64,613/- which included an interest component of ₹ 63,57,976/-. 3. The Tribunal s reasoning may be found in the following extracted portion:- 7. Having heard the Ld. Counsel for the parties, record on the case file including the grounds of appeal, impugned order as also .....

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ten and the date of issue has also been over written and the earlier dated of 31.03.93 has been cut and a new date 23.11.96 has been written without the counter signature of the issuing authority. There is also a variation on the description of goods/years. The earlier goods PVC resin was cut and replaced by the goods Ball Bearings and this second entry was also cut and replaced by the by goods PVC resin . It would only be relevant here to refer to Section 4(2)(a)(v) dealing with deduction from .....

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movement of such goods from Delhi; or . (3) for sale by him in the course of export outside India being a sale occasioning' the movement of such goods from Delhi, or a sale effected during the movement of such goods from Delhi, to a place outside India and after the goods have crossed the customs frontiers of India; or (B) of goods of the class or classes specified in the certificate of registration of such dealer as being intended for resale by him in Delhi, or for sale by him in the cours .....

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less the goods, in respect of which deduction is claimed, are proved to have been sold by the dealer within a period of twelve months from the date of his registration and the claim for such deduction is included in the return required to be furnished by the dealer in respect of the said sale: Provided further that no deduction in respect of any sale referred 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 .....

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the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer; 8. A plain reading of the above Section and provisions thereto would reveal that most of the restrictions are intended for the purchasing dealer and not for the selling dealer. The only restriction intended for the selling dealer is provided in the second proviso, which states that "no deduction in respect of any sale referred to in sub-clause (v) shall be allowed unless a true declar .....

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e Tribunal also relied upon a circular pressed into service by the Revenue dated 23.06.1995, which directed as follows:- 10. In respect of rule 8(3), reference was made on a specific query from this Tribunal as to whether there is any provision in the Act or Rule which prohibits a dealer from using a declaration form issued for an earlier year in the subsequent years, Ld. Counsel for Revenue produced a Circular issued by the Commissioner, Sales Tax on 21.09.1994. A careful perusal of this Circul .....

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signed by the Assessing Authority. 5. The Tribunal while doing so rejected the appellant s contention that the circulars were not binding and concluded that the concerned Authorities could issue directions by virtue of Section 4 (2)(a)(v) of the Delhi Sales Tax Act, 1975 (hereinafter to be referred as the Act ) and Rules 8 of the Delhi Sales Tax Rules, 1975 prescribed thereunder. 6. The Tribunal distinguished the decision in Commissioner of Income Tax, U.P. Vs. Indira Industries (2001) 122 STC 1 .....

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tually time immemorial in various judgments i.e. (i) the forms are obtained by the registered dealers from the prescribed authority; (ii) such forms are duly filled and signed by the purchasing registered dealer; and (iii) goods sold to the purchasing dealers are covered by the registration certificates issued. 8. It is contended that the rejection of the Forms in this case was on two grounds, firstly, that there were interpolations in form of cuttings that substitute the goods as well as the da .....

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y obtained the forms and deposited the tax duly reflecting the enormity of the transaction i.e. ₹ 9.24 crores to claim the benefit of the Form. Having regard to the judgment of this Court in the case of Swastik Industrial Powerline Ltd. Vs. Commissioner Trade & Taxes, Delhi, 2014 DSTC J-262. and Milk Food s case (supra), the question of disputing the genuineness of the Form on account of their interpolations did not arise. Learned counsel also relied upon the judgment of the Allahabad .....

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. Mr. Satyakam, learned counsel for the Revenue relied upon Rule 7 of the Delhi Sales Tax Rules, 1975 (hereinafter to be referred as the Rules ) and in particular emphasised upon second proviso to Rule 7 (1) thereof to say that even though not explicit, the law mandates that declarations have to be collected on yearly/annual basis. Elaborating further, it was submitted that in this case, it is quite evident that after the issuance of circular on 23.06.1995, the selling dealer resorted to interpo .....

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strators at the relevant point of time. Drawing a distinction between the circulars which are contrary to express provisions, which deal with matters that are not covered by such provisions, it was urged that the present circular dated 23.06.1995 was valid and consequently, the purchasing dealer could not seek benefits of adjustments/deductions, claimed by it. 11. It cannot be said from the above discussion that the transaction was in respect of the PVC resins. The Revenue/ Sales Tax Authorities .....

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in fact, those goods which the selling dealer was authorized to transact, the question of an interpolation at the behest or with the involvement of the purchasing dealer does not arise. Besides, the Form in this case was issued on 05.08.1994. The circular, as has been discussed previously, was issued on 23.06.1995. In the circumstances, ex facie, the circular could not have been operative. 12. As far as the question of the validity of the Form is concerned, the Revenue, in this case, relied upo .....

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r bills according as the sales are cash sales or sales on credit; and (b) a declaration in Form ST-1 duly filled in and signed by the purchasing dealer or a person authorised by him in writing : Provided that no single declaration is Form ST-1 shall cover more than one transaction of sale except in cases where the total amount of sales made in a year covered by one declaration is equal to or less than ₹ 5,00,000 or such other amount as the Commissioner may, from time to time, specify in th .....

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...................... To ..................................(Seller) ..................................(Address) Declaration given against: DUPLICATE/ORIGINAL FORM ST-1 (See rule 7) FORM OF DECLARATION FOR PURCHASES BY REGISTERED DEALERS Issued to holder of Serial No....... Registration Certificate Seal of the issuing No.................. authority To ..................................(Seller) ..................................(Address) Certified that the goods purchased from you as per bill/cas .....

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e............. Signature.................... TOTAL............ The above statements are true to the best of my knowledge and belief. Date............. Signature.................... Name of the person signing the declaration and his status in relation to the purchasing dealer. Name and address of the purchasing dealer. 14. From a combined reading of the Form and the Rules, it is quite evident that the declaration per se does not contain any provision limiting the date or dates or time period for .....

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