2022 (11) TMI 687 - HC - VAT and Sales Tax

Court emphasizes C-Forms for tax benefits, dismisses writ petition, deems assessments valid.

The court dismissed the writ petition, emphasizing the necessity for the petitioner to provide C-Forms to benefit from the concessional tax rate. Without ... Violation of principles of natural justice - Seeking declaration that the action of the respondents in not considering the various documents submitted by the petitioner as proof of inter-State trade in dals and pulses and insisting on submission of C-Forms as illegal - HELD THAT:- It is evident that if a dealer seeks to avail concessional rate i.e., 2% of the tax on his turnover he has to produce/file Form-C. If he fails to furnish Form-C, subsection (2) of Section 8 of CST Act would be attracted and the dealer would be liable to pay tax at the rate applicable to the sale or purchase of goods inside the appropriate State under the sales tax law of that State - It is true that State Government had exempted furnishing of C-Forms for the period upto 31.3.2015. But there is no such exemption for the period thereafter till coming into force of GST regime with effect from 1.7.2017. In the absence of such exemption, petitioner is bound to furnish the C-Forms if it wants to avail concessional rate of tax under sub-section (1) of Section 8. Since it failed to do so, for whatever reason, the rigour of sub-section (2) of Section 8 comes into play. Mere submission of representation cannot confer any right on a dealer to seek waiver of filing C-Forms. Principle of legitimate expectation cannot be invoked in a taxing statute. That apart, if the petitioner is aggrieved by the orders of assessment dated 11.3.2019 and 31.3.2019, petitioner had the remedy under Section 9 (2) of the CST Act read with Section 31 of the VAT Act to file appeal. In a writ proceeding under Article 226 of the Constitution of India, legality and validity of the assessment proceedings are not ordinarily examined when the statute provides for adequate and efficacious alternative remedy. It is not a case of violation of the principles of natural justice or violation of any law to invoke the writ jurisdiction in spite of having adequate and efficacious alternative remedy. That apart, there cannot be any equitable consideration in so far taxation statutes are concerned. There are no merit in the writ petition - petition is dismissed. Issues Involved:1. Legality of not considering various documents submitted by the petitioner as proof of inter-State trade in dals and pulses.2. Requirement and insistence on submission of C-Forms for availing concessional VAT.3. Validity of assessments and demand notices issued without C-Forms.4. Availability of alternative remedies for the petitioner.5. Applicability of the principle of legitimate expectation in taxation statutes.Issue-wise Detailed Analysis:1. Legality of Not Considering Various Documents Submitted by the Petitioner:The petitioner, a dealer in dals and pulses, contended that the respondents' refusal to consider various documents submitted as proof of inter-State trade and insisting on C-Forms was illegal, arbitrary, and unjust. The petitioner had been submitting invoices, waybills, and clearances from the Agricultural Market Committee as proof of inter-State transactions.2. Requirement and Insistence on Submission of C-Forms:The court examined Section 8 of the CST Act, which stipulates that for availing a concessional rate of 2% tax, the dealer must furnish C-Forms. Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, mandates the declaration in Form-C. The court noted that while the State Government had previously exempted the filing of C-Forms until 31.3.2015, no such exemption was provided for the period from 1.4.2015 to 30.6.2017. Consequently, in the absence of C-Forms, the petitioner was liable to pay tax at the higher rate as per Section 8(2) of the CST Act.3. Validity of Assessments and Demand Notices Issued Without C-Forms:The respondents issued show-cause notices and demand notices for the periods 2015-16 and 2016-17, determining higher tax rates due to the absence of C-Forms. The court upheld the assessments, stating that without C-Forms, the petitioner could not claim the concessional rate of tax. The court referenced the Supreme Court's decision in M/s. TVS Motor Company Limited Vs. State of Tamil Nadu, which supported the necessity of C-Forms to prevent tax evasion in inter-State sales.4. Availability of Alternative Remedies for the Petitioner:The respondents argued that the petitioner had an adequate and efficacious alternative remedy by way of appeal under Section 31 of the VAT Act read with Section 9(2) of the CST Act. The petitioner, however, filed the writ petition after the expiry of the limitation period for filing an appeal. The court emphasized that in the presence of an alternative remedy, the writ jurisdiction under Article 226 of the Constitution is not ordinarily invoked unless there is a violation of natural justice or any law, which was not the case here.5. Applicability of the Principle of Legitimate Expectation in Taxation Statutes:The petitioner asserted a legitimate expectation based on previous exemptions granted by the State Government. However, the court ruled that mere submission of representations does not confer the right to seek waiver of C-Forms. The principle of legitimate expectation cannot be invoked in taxation statutes, and there cannot be any equitable consideration in taxation matters.Conclusion:The court dismissed the writ petition, concluding that the petitioner was required to furnish C-Forms to avail the concessional rate of tax. In the absence of C-Forms, the assessments and demand notices issued by the respondents were valid. The court also highlighted the availability of alternative remedies and the inapplicability of the principle of legitimate expectation in this context.