2024 (9) TMI 1316 - HC - VAT / Sales Tax

Tax waiver applications must be reconsidered despite late document submission when no specific cutoff exists for supporting documents

The Andhra Pradesh HC ruled on tax waiver applications where petitioners failed to produce C-Forms within prescribed timelines. The court held that while ... Seeking waiver of tax - non-production of C-Forms - Whether the petitioners can file their documents for obtaining waiver of tax, at a later date? - whether such waiver of tax can be given without any further assessment/re-assessment/appellate order being passed by the concerned taxing authorities? HELD THAT:- The conditions for grant of waiver are contained in the memo dated 27.09.2016 which has been extracted above. A perusal of the terms and conditions, in this memo, make it clear that the waiver of tax given under the memos, is applicable to those dealers who remit their tax completely as per the provisions of the CST, Act for the period from 01.06.2014 to 31.12.2015 before 30.09.2018; complete their assessment for the period from 01.06.2014 to 31.12.2015 before 30.09.2018; produce documents of movement of goods in the form of lorry receipts/railway receipts and CST waybills; production of proof of exit of the goods from the State Andhra Pradesh by producing proof of exit from the last notified check post in the State or by production of ledger accounts or book entries relating to payment of charges for transporting goods to other States. A cutoff date is prescribed only in relation to payment of tax under the CST, Act and for completion of the assessment for the period from 01.06.2014 to 31.12.2015. There is no cutoff date prescribed for production of the other documents mentioned above. In the circumstances, the contention of the learned Government Pleader for Commercial Tax, that the documents required for grant of waiver should be produced before the cutoff date cannot be accepted. As far as the non-production of documents is concerned, the said non-production would be a question of fact, which would have to be gone into by the assessing authorities after considering whether the documents produced by the petitioners meet the terms and conditions set out in the memos. It would be inequitable, to grant relief to those dealers who approached in the year 2019 while denying such relief to the dealers who approached later. In any event, the applications are only for the purposes of ascertaining the eligibility of the dealers/petitioners for grant of waiver. The Endorsements issued by the respective tax authorities are set aside - The respective tax authorities, shall consider the applications of the petitioners afresh and grant waiver to those petitioners who are able to comply with the requirements of the documents set out in the memos - Petition disposed of. Issues Involved:1. Eligibility for waiver of tax despite non-production of C-Forms.2. Validity of the rejection of waiver applications by tax authorities.3. Applicability of re-assessment or appellate orders for granting waiver.4. Timeliness and laches in filing waiver applications.5. Production of necessary documents for waiver.Issue-wise Detailed Analysis:1. Eligibility for Waiver of Tax Despite Non-production of C-Forms:The petitioners, rice millers registered under the Central Sales Tax Act, 1956 (CST Act), sought waiver of tax at the concessional rate of 2% despite non-production of C-Forms. The Government of Andhra Pradesh issued memos allowing such waiver subject to certain conditions, including the completion of assessments and production of specific documents like lorry receipts and proof of exit from the state.2. Validity of the Rejection of Waiver Applications by Tax Authorities:The tax authorities rejected the waiver applications on three grounds:- The assessments for the relevant period had been completed more than four years prior, and reassessment was not permissible under Rules 14(A) sub-rules 8, 9, and 15 of the CST (Andhra Pradesh) Rules, 1957.- The necessary documents were submitted after the cutoff date of 30.09.2018.- In some cases, the required documents were not filed.3. Applicability of Re-assessment or Appellate Orders for Granting Waiver:The court held that the memos did not necessitate re-assessment or appellate orders for granting waiver. The memos envisaged waiver of tax already assessed, provided the dealers produced the necessary documents showing the movement of goods outside the state. Therefore, re-assessment or appellate orders were not required to give effect to the waiver.4. Timeliness and Laches in Filing Waiver Applications:The Government Pleader contended that the applications were delayed and lacked explanation for such delay, with most being filed in 2023. The court noted that many applications were initially filed in 2019 and renewed in 2023. It would be inequitable to deny relief to dealers who approached later while granting it to those who applied earlier. The applications aimed to ascertain eligibility for waiver, not to claim a vested right.5. Production of Necessary Documents for Waiver:The court found that the memos did not prescribe a cutoff date for the production of documents required for waiver. The condition for waiver was the completion of assessment and payment of tax before the cutoff date. The non-production of documents was a factual question to be determined by the assessing authorities based on compliance with the memo's terms.Conclusion:The court directed the tax authorities to reconsider the waiver applications afresh and grant waiver to petitioners who comply with the document requirements set out in the memos. This exercise was to be completed within two months, and no coercive steps were to be taken against the petitioners based on earlier assessment orders until the waiver decision was finalized. Pending miscellaneous petitions were closed without any order as to costs.