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IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Soumitra Saikia, J.
Dharampal Satyapal Ltd – Petitioner
Versus
The State of Assam, Represented by the Commissioner and Secretary to the Government of Assam, Finance (Taxation) Department and ors. – Respondents
W.P(C) NO.4359/2019
Decided On : 31-08-2024
| Table of Content |
|---|
| 1. quashing of tax notices based on valid sales transactions. (Para 1 , 2 , 3 , 4 , 5) |
| 2. validity and recognition of inter-state sale agreements. (Para 6 , 7 , 8 , 9) |
| 3. requirements for concessional tax rating under the cst act. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 4. unjustified demand for tax based on obsolete c forms. (Para 17 , 18 , 19 , 20) |
| 5. statutory obligations of sellers concerning validity of buyer's tax status. (Para 21 , 22 , 23 , 24 , 25 , 26) |
| 6. assessment process requirements before tax demand issuance. (Para 27 , 28 , 29 , 30 , 31) |
| 7. validity and effects of cancellation of c forms. (Para 32 , 33 , 34) |
| 8. judicial guidance on procedural due diligence for inter-state trade. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42) |
| 9. court's authority to review arbitrary demand notices without assessment. (Para 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54) |
JUDGMENT :
Soumitra Saikia, J.
This Writ Petition has been filed praying for quashing / recall of the Notice dated 03/07/2018 and the subsequent Reminder Notice dated 27/11/2018 issued by the Office of the Assistant Commissioner of Taxes, Unit-A, Guwahati directing the Petitioner to deposit the balance payable amount against the transaction mentioned in Form ‘C’ bearing No.OGC33242316909 received from M/s Om Traders, Gurugram, Haryana, which was subsequently cancelled by the Haryana VAT Authority.
2. The Petitioner is a company incorporated under the provisions of the Companies Act, 1956 and is having its Registered Office at 98, Okhla Industrial Estate, Phase-III, New Delhi-110020. The Petitioner, in the year 2015-16, sold Pan Masala amounting to Rs.62.60 Crore including tax from it’smanufacturing units located at Guwahati to M/s Om Traders, Gurugram on concessional rate of tax under the applicable provisions of CENTRAL SALES TAX ACT .M/s Om Traders was a registered dealer and carried a valid ‘Registration Certificate’ under section 11 of the Haryana Value Added Tax Act, 2003 with the Tax Identification Number (TIN) 06691950815 and was issued a ‘Certificate of Registration’ as a dealer under Section 7(1) / 7(2) of the CENTRAL SALES TAX ACT , 1956.
3. The Petitioner transacted with M/s Om Traders , Gurugram by selling them its finished product ‘Pan Masala’ from its manufacturing units located at Guwahati (Assam) for the period starting from 29/01/2016 to 29/03/2016 for a total taxable value of Rs. 61,37,43,561/- and paid Central Sales Tax of Rs. 1,22,74,871/- at prescribed concessional rate of 2% of value of goods to Assam VAT Authority in accordance with the Section 8(1) read with Section 8(4) of the CENTRAL SALES TAX ACT , 1956 and the Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957.
4. As required under the provisions of law, petitioner obtained statutory Form-C declaration from M/s Om Traders issued on 09.05.2017 in favour of the petitioner for the period 01.01.2016 to 31.03.2016.
5. This Form ‘C’ covers entirely the above mentioned inter-State sale to M/s Om Traders by the petitioner, and therefore, the tax liability under the applicable CST Act on the petitioner is determinable at concessional rate of 2%. All the goods were sold by petitioner to M/s Om Traders, Gurugram under the proper excisable sale invoices and there is no dispute in this regard.
6. However, the Assistant Commissioner of Taxes, Unit-A, Guwahati, vide the impugned Notice dated 03.07.2018 directed the petitioner to deposit the balance amount of tax against the above mentioned inter-State sale to M/s Om Traders on the ground of the Form ‘C’ issued to the petitioner by the M/s Om Traders, being declared obsolete by the Haryana Government.
7. The petitioner, in reply to the above notice, sent a letter dated 27.08.2018 to the respondent No. 3 noting that both the parties, i.e. the petitioner and M/s Om Traders, were registered dealers in their respective states and made inter-State sale transaction on principal to principal basis, with genuine and valid docu
The cancellation of a tax declaration form does not retroactively affect previously valid inter-state sales, and tax demand notices cannot be deemed enforceable without prior assessment.
Rigid time limits for filing declaration forms under tax acts cannot be enforced if they conflict with statutory provisions allowing flexibility in submissions.
C-Forms cannot be cancelled retrospectively, and the benefit of the C-Forms in question cannot be denied to the petitioner.
The court ruled that non-furnishing of 'C' Forms by a purchaser due to financial distress does not absolve entitlement to tax exemptions under Section 6(2) of the Central Sales Tax Act, 1956.
The court established that the ultimate burden of tax determines the entitlement to refunds under the CST Act, regardless of the dealer's registration status.
Statutory requirements under sales tax legislation must be strictly adhered to for tax benefits; delays in compliance cannot be condoned by tribunals.
The court ruled that inadvertent errors in sales declarations do not invalidate claims for turnover deductions under the Sales Tax Act.
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