1982 (11) TMI 143 - HC - VAT and Sales Tax

Appellate authorities can consider C forms at appeal stage; State Government's revisions dismissed.

The Full Bench concluded that appellate authorities have the power to entertain C forms filed at the appellate stage and allow further time for filing ... Entertainment of C form declarations at the appellate stage - power of appellate authority to allow extension of time under the proviso to section 8(4) - construction favouring parity between assessing authority and tax appellate authority - proviso to rule 12(7) inconsistent with proviso to section 8(4) and ultra vires to that extent - remand or setting aside of assessment by appellate authority to enable filing or scrutiny of C formsEntertainment of C form declarations at the appellate stage - power of appellate authority to allow extension of time under the proviso to section 8(4) - Appellate authorities can receive C form declarations produced at the appellate stage and can allow further time for filing on sufficient cause. - HELD THAT: - The Full Bench held that the proviso to section 8(4) of the Central Sales Tax Act confers a power to permit further time for filing C forms which, by construction and in line with Supreme Court authorities on tax appeals, is exercisable by any authority having jurisdiction to deal with the assessment (including appellate authorities). The court explained that an appeal in tax matters is functionally a continuation of assessment; consequently an appellate authority, absent statutory inhibition, possesses the same powers as the assessing authority for purposes of dealing with the assessment on appeal. Reliance on McMillan's principle was held apposite: powers conferred on an assessing authority are exercisable by the appellate authority when reviewing the assessment. Accordingly the Tribunal and the Appellate Assistant Commissioner may entertain belated C forms where sufficient cause is shown.The appellate authority has power to allow further time and to receive C forms at the appellate stage where sufficient cause is established.Proviso to rule 12(7) inconsistent with proviso to section 8(4) and ultra vires to that extent - construction favouring parity between assessing authority and tax appellate authority - The proviso to rule 12(7) cannot be applied so as to negate the wider statutory discretion under the proviso to section 8(4); to the extent rule 12(7) imposes more onerous conditions it is ultra vires. - HELD THAT: - The Bench contrasted the language and approach of the proviso in the statute and the proviso in the rule. Parliament's proviso to section 8(4) permits allowance of further time upon sufficient cause addressed to the authority's mind, without imposing an onus-like test. The proviso to rule 12(7) places a burdensome, Limitation Act-style test on the assessee and narrows the authority's discretion. Because rule-making power cannot override or contradict the statute, the rule's proviso is, to the extent it is inconsistent with the statutory proviso, invalid. The court therefore directed that the statutory proviso governs the power to allow further time.The proviso to rule 12(7) is inconsistent with and to that extent ultra vires the proviso to section 8(4); the statutory proviso governs the grant of further time.Remand or setting aside of assessment by appellate authority to enable filing or scrutiny of C forms - remedial powers of Tribunal under section 36 of the Tamil Nadu General Sales Tax Act - The Tribunal may either directly admit C forms and apply the concessional rate, or set aside/remand the assessment to the assessing authority for scrutiny or fresh assessment to give effect to accepted C forms. - HELD THAT: - The court held that where an appellate authority is satisfied about sufficient cause it may proceed in different modes: receive C forms and apply the concessional rate; remit the matter to the assessing authority for scrutiny of the forms; or set aside the assessment and direct a fresh assessment on the basis of the C forms. The Bench observed that even if the Tribunal prefers to achieve the result indirectly by remand, its wide appellate powers to set aside and direct reassessment render such a course legitimate. Exercise of these powers to do equity to a deserving taxpayer is not a collateral or mala fide use of power.The Tribunal can admit C forms, or remand or set aside the assessment to enable scrutiny and reapportionment on the basis of those forms; similar powers apply to the Appellate Assistant Commissioner.Final Conclusion: The decisions of the Sales Tax Appellate Tribunal in the referenced cases are upheld; appellate authorities may admit C forms produced at the appellate stage or, alternatively, set aside or remand assessments to give effect to such forms; the revisions filed by the State are dismissed and certificate of fitness to appeal to the Supreme Court granted on points of general importance. Issues Involved:1. Whether the appellate authority can entertain C form declarations filed by a registered dealer at the appellate stage.2. Interpretation of Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, and its proviso in relation to the powers of the appellate authority.3. The validity of the Tribunal's decision to remand cases to the assessing authority for considering C forms filed at the appellate stage.4. The jurisdiction and powers of the appellate authority under the Central Sales Tax Act, 1956, and Tamil Nadu General Sales Tax Act, 1959.Detailed Analysis:1. Whether the appellate authority can entertain C form declarations filed by a registered dealer at the appellate stage:The Full Bench was tasked with determining whether an appellate authority can entertain C form declarations filed at the appellate stage under the Central Sales Tax Act, 1956, or the Rules made thereunder. The key statutory provision under consideration was Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, which mandates that C forms shall be furnished 'up to the time of assessment by the first assessing authority.' The proviso to Rule 12(7) allows further time for filing C forms if the prescribed authority is satisfied that sufficient cause prevented timely filing.2. Interpretation of Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, and its proviso in relation to the powers of the appellate authority:The court examined Rule 12(7) and its proviso, noting that the 'prescribed authority' mentioned is the first assessing authority. The Government Pleader argued that the appellate authority cannot entertain C forms as it is not the prescribed authority. The court, however, held that the appellate authority has the same powers as the assessing authority, as an appeal is essentially a continuation of the assessment process. The court emphasized that the appellate authority's powers are conterminous with those of the assessing authority, enabling it to allow further time for filing C forms.3. The validity of the Tribunal's decision to remand cases to the assessing authority for considering C forms filed at the appellate stage:The court upheld the Tribunal's decision to remand cases to the assessing authority for considering C forms filed at the appellate stage. The Tribunal's action was deemed proper, as it could achieve indirectly what it could do directly. The court noted that the Tribunal has the power to set aside assessments and direct the assessing authority to re-do the assessment, thereby allowing the consideration of C forms filed late.4. The jurisdiction and powers of the appellate authority under the Central Sales Tax Act, 1956, and Tamil Nadu General Sales Tax Act, 1959:The court reiterated that the appellate authority under the Central Sales Tax Act, 1956, and Tamil Nadu General Sales Tax Act, 1959, has wide powers similar to those of the assessing authority. The appellate authority can confirm, reduce, enhance, annul, or set aside assessments and direct fresh assessments. The court referenced Supreme Court rulings, including McMillan's case, which established that appellate authorities in tax matters have the same powers as the original assessing authorities.Conclusion:The Full Bench concluded that appellate authorities have the power to entertain C forms filed at the appellate stage and allow further time for filing such forms if sufficient cause is shown. The Tribunal's decisions to remand cases for considering C forms were upheld, and the revisions filed by the State Government were dismissed. The court also declared the proviso to Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, as ultra vires to the extent it conflicts with the proviso to Section 8(4) of the Central Sales Tax Act, 1956. The court granted a certificate of fitness for appeal to the Supreme Court due to the importance of the issues involved.