Rectification applications must address an express alternative tax-rate claim on merits, even where further time to file declarations is refused.

In rectification proceedings, the HC upheld refusal to grant further time to file C Form declarations, noting that adequate opportunity had already been given and the assessments had attained finality. However, where the rectification applications expressly raised an alternative substantive claim that the disputed motor sales as capital goods should be taxed at 5% even without C Form declarations, the assessing authority was required to decide that claim on merits. Because the operative order dealt only with additional time and omitted the alternative prayer, the matter was left open for fresh adjudication after hearing the assessee.

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Issues: (i) Whether the assessee was entitled to further time in rectification proceedings to file C Form declarations and obtain relief on that basis; (ii) Whether the assessing authority was bound to consider the alternative prayer that the disputed sales of motors as capital goods be taxed at 5% even without C Form declarations.

Issue (i): Whether the assessee was entitled to further time in rectification proceedings to file C Form declarations and obtain relief on that basis.

Analysis: The rectification applications were filed after assessment and sought additional time to produce C Form declarations. The authority found that sufficient time had already been afforded, that the assessments had attained finality, and that the assessee was not in possession of the forms. The Court accepted that conclusion and found no infirmity in refusing further time.

Conclusion: The refusal to grant further time to file C Form declarations was upheld and is against the assessee.

Issue (ii): Whether the assessing authority was bound to consider the alternative prayer that the disputed sales of motors as capital goods be taxed at 5% even without C Form declarations.

Analysis: The rectification petitions expressly contained an alternative substantive prayer based on the nature of the goods and the applicable rate of tax. Though the order recorded the application, the operative portion dealt only with the request for additional time and did not decide the alternative prayer. The omission rendered the order incomplete to that extent, requiring the assessing authority to hear the assessee and decide the alternative claim on merits.

Conclusion: The alternative prayer was left open for fresh consideration by the assessing authority and is in favour of the assessee.

Final Conclusion: The challenge failed on the request for more time to file declarations, but the assessment authority was directed to adjudicate the alternative tax-rate claim afresh after hearing the assessee.

Ratio Decidendi: When a rectification application raises an express alternative substantive claim, the authority must adjudicate that claim on merits; failure to do so leaves the order incomplete, even if one limb of the request is rightly rejected.

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