Court orders tax department to provide 'C' declaration forms for interstate transactions, deems denial unjustified. Recovery proceedings allowed.

The Court allowed the writ petition, directing the tax department to supply the 'C' declaration forms to the petitioner, emphasizing the importance of these forms for interstate transactions to claim concessional tax rates. The Court held that denial of the forms due to alleged tax arrears was unjustified as there was no specific provision empowering the tax department to do so. The order did not prevent the tax department from initiating recovery proceedings for outstanding tax amounts, concluding without awarding costs to either party.

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Issues:
Denial of 'C' declaration forms due to alleged tax arrears.

Analysis:
The case involved a writ petition filed by a company seeking a direction to quash the proceedings of the tax department, which had blocked the issuance of 'C' declaration forms due to alleged tax arrears. The petitioner, a registered dealer under the VAT and CST Acts, purchased components from other states and needed 'C' declaration forms to avail concessional rates. The tax department rejected the petitioner's request for 'C' forms citing tax arrears, despite an appeal pending. The main issue was whether the denial of 'C' forms was justified based on tax arrears.

The Court considered the importance of 'C' declaration forms for interstate transactions to claim concessional tax rates. The petitioner's inability to obtain these forms meant they would have to pay taxes without availing concessions. The Court referred to a previous case where it was held that coercive measures cannot be taken to recover taxes if not legally obligated. The Court noted that the tax department did not have the power to deny 'C' forms based on tax arrears without any specific provision empowering them to do so.

Referring to legal principles and precedents, the Court allowed the writ petition, directing the tax department to supply the 'C' declaration forms to the petitioner. However, the Court clarified that this order did not prevent the tax department from initiating recovery proceedings for any outstanding tax amounts. The judgment concluded by closing any related pending petitions and did not award costs to either party.

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