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2017 (6) TMI 790 - MADRAS HIGH COURT

2017 (6) TMI 790 - MADRAS HIGH COURT - TMI - Benefit of concessional rate of tax at 2% - denial for the reason that the Form C declaration covered more than one quarter, that is, recorded sales for the month in which delivery of goods had been made - the case of appellant is that benefit cannot be denied on the basis of Form C, if, otherwise, the transactions were genuine - whether the Form 'C' declarations filed by the petitioner/ Assessee, could be rejected, only on the ground that they captur .....

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, merely because the Form 'C' declarations captured the transactions from the point of view of the date of delivery as against when they were despatched, cannot be the reason for rejecting the Form 'C' declarations. - Circular dated 20.10.2015 would show that the Revenue itself has taken a view that technicalities, to which we have made a reference above, ought not to come in the way of acceptance of declaration forms. A case in point is, when, goods are despatched on the last day of the las .....

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e Court was delivered by Rajiv Shakdher, J. ) 1.Issue notice. Mr.S.Kanmani Annamalai, learned Additional Government Pleader (Taxes) accepts notice on behalf of the respondent. With the consent of the learned counsels for the parties, the matter is taken up for hearing and final disposal. 1.1.Consequently, the tax revision case is admitted and, the following questions of law are framed for consideration by this Court: (i).Whether in the facts and circumstances of the case, the Hon'ble Sales T .....

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Sales Tax Appellate Tribunal, committed an error of law in disallowing concessional rate of 2% on inter-State sales effected by the petitioners on a turnover of ₹ 16,22,19,255/- to M/s.Savex Computers Limited and on a turnover of ₹ 1,25,29,283/- to M/s.Karuna Management Services Private Limited, when in fact the substantive requirement of Section 8(1) read with Section 8(3) and 9 (4) of the CST Act, 1956, had been satisfied by the inter-State sales effected on the petitioners to M/s. .....

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mited resulting in the tax liability to reduce to only ₹ 1,366,797. 2.Before we proceed further, it is necessary to point out that the petitioner/ Assessee also seeks to place reliance on a Circular issued by the Commissioner of Commercial Taxes being: Circular No.44/2015 D3/2573/2015, dated 20.10.2015 ( in short, 'the circular'). 2.1.We may further note, a fact, which the counsel for the petitioner concedes, which is that, this circular was not brought to the notice of the Tribuna .....

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Assessment Year 2010-2011, it was assessed to tax on total and taxable turnover of ₹ 388,78,78,419/- and ₹ 208,02,20,270/-, respectively, albeit, under the Central Sales Tax Act, 1956 (in short, the 1956 Act). 3.2.The Assessing Officer vide order dated 30.12.2013, levied a tax at the rate of 12.5%, as against concessional rate of 2% in respect of inter-state sales which were, according to him, not covered by the Form 'C' Declarations. The Assessing Officer, as it appears fro .....

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ai (in short, the First Appellate Authority). 4.1.The First Appellate Authority vide order dated 04.09.2014 partly allowed the appeal. The petitioner/ Assessee being aggrieved, preferred an appeal with the Tribunal. The Tribunal, qua the point in issue, ruled against the petitioner/ Assessee and in that behalf, made the following observations: With regard to assessment made on the turnover of ₹ 17,47,48,538/- @ 4% by the Assessing Officer, it is seen that the Assessing Officer has levied h .....

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ifferent quarters. If there are minor defects in the C Form submitted, the Assessing Officer should give reasonable opportunity to the dealer to rectify the defects. Admittedly, one declaration in C Forms can cover all transactions in one quarter, irrespective of total amount/ value of transaction during the quarter. If a transaction covers more than one quarter, separate C Form is required to be issued for each quarter. Rule 12(7) of the CST (R&T) rules 1957 clearly states that the declarat .....

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ters in a financial year or of different financial years, it shall be necessary to furnish a separate declaration or certificate in respect of goods delivered in each quarter or a financial year. Thus the declaration mere (sic) relate to sales made in every quarter in terms of second proviso and that it shall be necessary to furnish separate declarations for the same transaction of sale if there are different delivery dates spread over different quarters. Under Section 8(4) of the Central Sales .....

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and rectified declarations after making necessary corrections in the declaration Forms given by the purchasing dealers, the appellants are not in a position to produce the revised declaration C Forms after rectification even after a period of nearly 5 years. A perusal of the particulars contained in Annexure L filed by the Authorised Representative for the appellant, it is nothing but a statement signed by the purchasing dealer Tvl.Savex Computers Ltd., for the entire disputed years and no neces .....

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orrect and accordingly, the point is answered. 5.Mr.Prasad, who appears on behalf of the petitioner/ Assessee submits that the Form 'C' Declarations, which had been submitted to claim a concessional rate of tax, ought to have been accepted, as substantive compliance had been made in terms of Section 8(1) read with Section 8(3) and 8(4) of the 1956 Act, as also with the provisions of Rule 12(7) of the Central Sales Tax Rules (RNT) Rules, 1957 (in short, the 1957 Rules). 5.1.In support of .....

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ere genuine. 5.3.In other words, according to Mr.Prasad, the sales transaction captured in the Form 'C' Declaration, were co-relatable to the date of delivery as against, when the subject goods were despatched. 5.4. In this context, Mr.Prasad stated that the Tribunal failed to take note of the fact that the contracts entered into with the two buyers, namely, Savex Computers Ltd. and Karuna Management Services Private Limited, whose Form C declarations were rejected, required delivery of .....

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ould be filed to cover all transactions of sale, which took place in a quarter of a given financial year, between two dealers. Second, where, in a given sale transaction, the delivery of goods is spread over different quarters in a financial year or, even to different financial years. 6.2.In this situation, according to the learned counsel, the third proviso to Rule 12(1) envisages furnishing separate declarations, in respect of goods delivered in each quarter of a financial year, or in differen .....

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he two provisos referred to under Rule 12 (1) of the 1957 Rules, its case certainly falls under sub-rule (7) of Rule 12 of the 1957 Rules as the declarations were filed, within the prescribed time limit. 7.2.Furthermore, the learned counsel submits that the proviso to sub-rule (7) of Rule 12 empowers the prescribed Authority to accept declarations, which are not filed within the time limit prescribed in the main sub-Rule, if, sufficient cause is shown for condonation of delay. 8.For all these re .....

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d High Court in the matter of: Jubilant Life Sciences Limited Vs. Commissioner, Commercial taxes, (2014) 70 VST 296 (All). 8.3. Apart from the aforesaid, Mr.Prasad also submitted that the Tribunal did not advert to the ground advanced by the petitioner/Assessee, which is that, the purported defective Form C declarations obtained by it, were of a far lesser value, than that which was noticed by the Authorities below. Mr.Prasad in this behalf sought to bring to our attention, the fact that, so far .....

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hat the objection taken by the Revenue was essentially, technical in nature and therefore, the declarations filed could not have been rejected. 9.Mr.Annamalai, who appears on behalf of the respondent, largely relies upon the impugned judgment of the Tribunal, in support of his stand. However, Mr.Annamalai, cannot, but submit that the Assessing Officer under Rule 12 (7) read with the proviso, has the power to accept the delayed declarations, as long as they are genuine and, it could be establishe .....

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the parties and perused the record. 11.Quite clearly, the only issue, which arises for consideration is: whether the Form 'C' declarations filed by the petitioner/ Assessee, could be rejected, only on the ground that they capture the sale transactions relatable to the date, when the delivery of goods took place, as against, when they were despatched. 12.In terms of provisions of Section 8 of the 1956 Act, the petitioner/ Assessee was entitled to a concessional rate of tax, only if, sale .....

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elivery, as against the date when the subject goods were despatched. 13.In our view, if, the genuineness of the transaction is not in doubt, then, merely because the Form 'C' declarations captured the transactions from the point of view of the date of delivery as against when they were despatched, cannot be the reason for rejecting the Form 'C' declarations. 13.1.The provisos to Rule 12(1) which have been taken recourse to, by the Authorities below cannot be read in a manner, whi .....

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ved in respect of declaration forms furnished by dealers towards inter-state sales/ consignment sales etc. being rejected by the assessing officers on the ground that the date of sale invoice doesn't agree with those mentioned in the declaration forms. It is pertinent to note here that the other state dealers-buyers/ consignees might have issued declaration forms for all the goods received by them in a quarter/ calendar month irrespective of the fact of dispatch date of such goods and in suc .....

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the case of any transaction sale, the delivery of goods is spread over to different quarters in a financial year or of different financial years, it shall be necessary to furnish a separate declaration or certificate in respect of goods delivered in each quarter of a financial year. 3.As per the provisos, it is necessary to furnish the declaration forms in respect of goods delivered in each quarter of a financial year. In reality, as a trade practice, it may happen that goods dispatched on last .....

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ers in other states. If this principal objective is satisfied, the purpose for which declaration forms are intended need not be negated on such insignificant grounds. Accordingly, to resolve the practical difficulties being faced by dealers owing to prevailing trade practices, it is clarified that such declaration forms in respect of delivery of goods being spread over to different quarters/ calendar months in a financial year or of different financial years can be accepted as valid declarations .....

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ncial year and, they are recorded by the buyer in his record, based on the date of delivery or receipt and declaration is issued accordingly. In such circumstance, could it be said that the seller would not be given the benefit of the Form C declaration. We think not. 14.1. The argument of Mr.Annamalai, that the circular is prospective cannot be accepted, as, in our view, the circular only clarifies the position, as it ought to obtain. The reason for the same, is, that the Rules cannot constrict .....

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ounts of that particular year. 15.1. For the sake of convenience, the relevant extract of the said Rule is set forth hereunder: 10.(1) A registered dealer, who wishes to purchase goods from another such dealer on payment of tax at the rate applicable under the Act ...................... (2) A registered dealer who claims to have made a sale to another registered dealer shall in respect of such claim, attach to his return in Form 1 the portion marked 'Original' of the declaration received .....

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