Tax exemptions under the Central Sales Tax Act require strict compliance with documentation; failure to produce necessary forms results in disallowance of claims.

JUDGMENT :

G.Jayachandran, J.

The Tax Case is filed by the dealer registered under the Tamil Nadu Value Added Tax Act, 2006 and the Central Sales Tax Act, 1956.

2. The petitioner is a large taxpayer engaged in the business of paper boards and speciality papers. During the assessment period 2016–2017, the petitioner regularly filed its monthly returns under the Tamil Nadu Value Added Tax Act as well as the Central Sales Tax Act. The petitioner has claimed deduction from the turnover in respect of discounts extended to its customers through credit notes. After such deduction, the petitioner paid tax at the rate of 2% on the taxable turnover. The Assessing Authority rejected the claim of deduction in respect of the total turnover of Rs.8,47,14,699/- on the ground of absence of sufficient documentary evidence.

3. Aggrieved by the assessment order, the petitioner filed a First Appeal before the Joint Commissioner (ST) (Appeals) in A.P.No.20 of 2018, questioning the assessment order on the ground that the Assessing Officer had erroneously disallowed the claim of deduction towards discount of Rs.6,62,97,715/- out of the total sum of Rs.8,47,14,699/-.

4. The First Appellate Authority, vide order dated 21.06.2019, partly allowed and partly dismissed the appeal. The Appellate Authority, after framing five issues, received Form ‘C’ declaration for the total turnover of Rs.21,33,34,712/- and accepted the inability of the dealer/appellant to collect Form ‘C’, Form ‘F’ and Form ‘H’ declarations for the remaining value of Rs.9,13,77,110/- taxable at the rate of 5% and Rs.1,65,105/- taxable at the rate of 14.5%. Accordingly, the tax is imposed for non-production of Form-C declarations was confirmed.

5. However, in respect of turnover of Rs.21,33,34,712/-, for which Form ‘C’ declarations were produced, the matter was remanded to the Assessing Authority for making fresh disposal after verification of the correctness of the Form. In respect of tax imposed for non-production of Form - ‘H’ and Form – ‘F’ declarations, the appeal was dismissed to that extent. However, insofar as the production of Form – ‘F’ to turn over of Rs.1,16,93,397/- is concerned, the matter was remanded back to the Assessing Authority for making fresh disposal after verification of correctness of the Form to be produced. With regard to the claim of exemption towards free samples to customers, the Assessing Authority disallowed the claim. However, the Appellate Authority accepting the documents produced by the assessee during the appeal to the extent of Rs.1,97,432/- and remanded the matter back to the Assessing Authority to verify the document and pass orders. In respect of the issue regarding the sale returns, for non-filing of documents to the tune of Rs.60,09,835/- and Rs.70,69,406/-, the matter was also remanded back to the Assessing Authority to verify the documents and pass orders.

6. Aggrieved by the order of the partly remand and partly dismissal, the Assessee preferred appeal before the Tamil Nadu Sales Tax Appellate Tribunal, Chennai, in T.A.No.129 of 2019. The Appellate Tribunal heard the appeal and passed order on 20.02.2025.

7. The petitioner/dealer should be given an opportunity to produce declaration Forms and connected documents for the claim of concessional rate of tax/exemption from tax before the Assessing Authority. The Assessing Officer shall consider the original ‘C’ Form for Rs.1,50,500/- and balance declaration Forms, if any, of the dealer and thereafter pass appropriate orders on merits, in accordance with law. Considering all aspects, the appeal in respect of ‘C’ Forms produced for Rs.1,50,500/- is remanded back to the Assessing Officer and the appeal related to the non-submission of balance ‘C’, ‘F’ and ‘H’ Forms are dismissed.

8. Being aggrieved by the said order, the present appeal is filed on the ground that there is inconsistency in the findings of the Tribunal. It is contended that, after observing that the First Appellate Authority has not considered