2016 (10) TMI 658 - HC - VAT and Sales Tax

Court dismisses challenge to tax assessment orders under Bihar VAT Act for failure to provide Form 'F'

The court dismissed the petitioner's challenge to assessment orders under the Bihar Value Added Tax Act, 2005 for the mentioned assessment years. The ... Exemption for branch transfers on furnishing Form F under the Central Sales Tax regime - proof of inter state branch transfer - insistence on statutory mode of proof - production of Form F at any stage of assessment proceedingsExemption for branch transfers on furnishing Form F under the Central Sales Tax regime - proof of inter state branch transfer - insistence on statutory mode of proof - Whether documents other than Form F can be accepted as proof of inter state branch transfers so as to deny liability under the Central Sales Tax Act. - HELD THAT: - The Court held that the statutory scheme requires the prescribed Form F to be furnished to claim exemption for branch transfers; where the law prescribes a particular mode of proof, that requirement cannot be satisfied by other documentary material. The court rejected the petitioner's contention that alternative documents could substitute for Form F and noted that the statutory requirement of furnishing Form F is decisive for entitlement to tax credit/exemption. Earlier orders relied upon by the petitioner did not alter this statutory mandate: the High Court's order in Apollo Tyres merely allowed production of the necessary form at subsequent stages but did not hold other documents equivalent to Form F; the Supreme Court's order in Ambica Steels Ltd. was a fact specific direction and did not lay down a general ratio permitting substitution of Form F. [Paras 7, 10]Other documents cannot be accepted in lieu of Form F; in the absence of Form F the petitioner is not entitled to the exemption or credit claimed.Production of Form F at any stage of assessment proceedings - Whether Form F can be produced at a subsequent stage of the assessment proceedings. - HELD THAT: - The Court observed that production of Form F is permissible at subsequent stages of assessment proceedings and that the earlier order in Apollo Tyres Limited simply recognised the ability to produce the requisite form later in proceedings. However, this procedural allowance does not mean that other documents can substitute for Form F; the distinction between timing of production and the mode of proof was emphasised. [Paras 8]Form F may be produced at any subsequent stage of the assessment proceedings, but until it is furnished the exemption/credit cannot be allowed.Final Conclusion: Writ petitions challenging the demands in respect of Assessment Years 2010-2011 and 2011-2012 are dismissed: the statutory requirement of furnishing Form F for exemption on branch transfers must be complied with and other documents cannot substitute for Form F, although Form F may be produced at later stages of assessment proceedings. Issues:Challenge to assessment under Bihar Value Added Tax Act, 2005 for Assessment Years 2010-2011 and 2011-2012. Interpretation of Section 9(2) of the Central Sales Tax Act, 1956 regarding branch transfers and the necessity of Form 'F' for tax exemption.Analysis:The petitioner, a company engaged in retail sale of leather ware, challenged assessment orders under the Bihar Value Added Tax Act, 2005 for the mentioned assessment years. The dispute revolved around branch transfers between offices located outside Bihar and the levy of tax under Section 9(2) of the Central Sales Tax Act, 1956. The petitioner contended that due to non-receipt of Form 'F' from other states, alternative documents should suffice to prove the transfers (para 4).The petitioner cited a previous order of the court and a Supreme Court judgment to support their argument. However, the court held that the requirement of Form 'F' under the CST Act cannot be substituted by other documents to prove transactions between the petitioner's branches in Bihar and Jharkhand. The court emphasized that statutory requirements must be strictly adhered to, and tax exemption is only granted upon furnishing Form 'F' (para 7).The court distinguished the previous order cited by the petitioner, stating that while Form 'F' can be provided at any stage of assessment, the question remains whether other documents can be considered for tax credit. The court clarified that the previous judgment did not address this specific issue (para 8). Similarly, the Supreme Court order mentioned by the petitioner was deemed specific to the facts of that case and not establishing a general principle (para 9).Highlighting the statutory nature of requiring Form 'F,' the court emphasized that the petitioner cannot claim benefits based on alternative documents in the absence of this statutory provision (para 10). Consequently, the court found no merit in the writ applications and dismissed them accordingly (para 11).