2026 (1) TMI 17 - HC - VAT / Sales Tax

Export sales turnover claimed exempt u/s5(1) on H-forms, with revisional refusal to consider them set aside.

Whether the escaped turnover was exempt as export sales under s.5(1) CST Act upon production of H-forms was the dominant issue. The HC held that the ... Turnover escaped of assessment - said turnover relates to export of rice under Section 5(1) of the CST Act - petitioner contends that it had produced the necessary H-forms on 11.02.2016, before the Commercial Tax Officer, after which the Commercial Tax Officer did not take any further steps - HELD THAT:- It is not understandable as to how the question of filing H-forms after the order of assessment would arise in the present case. The order of assessment, dated 31.03.2015, did not touch the aforesaid turnover. It is only subsequently that the Commercial Tax Officer raised this issue but did not take it to its logical conclusion. Consequently, the Deputy Commissioner raised the very same issue and refused to take into account the H-forms produced by the petitioner even after recording that such xerox H-forms had been placed before him. The subsequent endorsement of the Deputy Commissioner in the year 2023 would again show that the H-forms had in fact had been produced before the Commercial Tax Officer who returned them under a specific endorsement, mentioned above, in the year 2023. The facts on record clearly make out a case in favour of the petitioner. As necessary H-forms had been filed by the petitioner and photostat copies of the same had also been placed before the Deputy Commissioner, the same should have been taken into account and the benefit of such H-forms should have been given to the petitioner. The order of revision, dated 19.04.2018, is set-aside and accordingly, this Writ Petition is allowed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the revisional authority was justified in revising the assessment and raising additional tax on the ground that the disputed turnover had 'escaped assessment', despite the dealer having produced H-forms (and copies thereof) relating to export sales. (ii) Whether the revisional authority erred in refusing to take into account H-forms on the premise that they were not produced before the assessing authority at the time of original assessment, and in recording that no documents were placed despite the record showing production of such documents. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Validity of revision and additional demand when H-forms evidencing export sales were produced Legal framework (as discussed by the Court): The Court proceeded on the basis that exemption for export sales is claimable on production of H-forms in relation to export of rice under Section 5(1) of the CST Act, and that the dispute concerned whether such proof had been produced for the turnover treated as escaped. Interpretation and reasoning: The Court noted that the original assessment did not deal with the disputed turnover and that the assessing authority later issued a notice specifically calling upon the dealer to produce proof of export and that the dealer asserted it had produced the H-forms. In the revision proceedings, the revisional authority itself recorded that xerox copies of H-forms were filed before it for the disputed turnover. The Court also relied on the subsequent endorsement indicating that the H-forms had been returned by the assessing authority, supporting that the forms had in fact been produced. On these facts 'on record', the Court held the material established the dealer's claim and the H-forms ought to have been considered for granting the benefit sought. Conclusion: Since necessary H-forms had been filed and copies were produced before the revisional authority, the additional demand based on treating the turnover as taxable was unsustainable; the revisional order could not stand. Issue (ii): Refusal to consider H-forms on the ground they were not produced at assessment stage / incorrect factual finding of non-production Legal framework (as discussed by the Court): The Court addressed the revisional authority's reasoning that documents could not be looked into because they were not before the assessing authority at the time of assessment, in the context that the disputed turnover was not part of what was addressed in the assessment order. Interpretation and reasoning: The Court found it 'not understandable' to treat the H-forms as filed 'after the order of assessment' because the assessment order did not touch the disputed turnover and the issue arose only subsequently. The Court held the revisional authority was wrong to refuse consideration of the H-forms after recording their production in xerox form, and the later endorsement further indicated that the original H-forms had been with the assessing authority and were returned later. The Court therefore rejected the factual premise that no documents were placed and rejected the legal premise that the H-forms were to be ignored for being filed after assessment in the circumstances of this case. Conclusion: The revisional authority's refusal to consider the H-forms and the finding of non-production were held unsustainable on the record; consequently, the revisional order was set aside. RESULT The Court set aside the revisional order raising additional tax and allowed the petition, holding that the H-forms produced should have been taken into account and the benefit flowing from them granted.