2026 (1) TMI 1071 - HC - VAT / Sales Tax

Supply of dolomite without Form C prompts reassessment; court orders fresh decision after buyer produces Form C

Challenge concerns levy of 5% tax where seller could not produce Form C; purchaser had obligation to obtain and furnish Form C under law, but failed to do ... Challenge to assessment and first appellate orders - registered company failed to proved C-Forms according to Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 read with Section 8(4) of the CST Act, 1956 despite several reminders - HELD THAT:- It is true that the second appeal preferred by the petitioner was dismissed for want of prosecution vide order dated 17.12.2018 but, the learned Tribunal is not in existence, therefore, the matter cannot be remitted back to the learned Tribunal to decide it on merits. The petitioner supplied dolomite to respondent No. 5 pursuant to various supply orders in the year 2008-09 & 2010-11 and Form-C as required under the law was not issued in favour of the petitioner by respondent No. 5. The Assessing Authority while passing assessment order imposed 5 % tax in absence of Form-C. Bare reading of Section 8(4) of the CST Act, 1956, would make it clear that purchaser is under obligation to obtain Form C from the prescribed authority and to provide the same to the seller/supplier, but in the present case on account of unavoidable circumstances, the purchaser/respondent No. 5 failed to provide said document/Form-C to the petitioner, therefore, it could not be produced before the Assessment Officer in the year 2015 and an adverse order was passed against the petitioner - The Form-C has already been provided by respondent No. 5 to the petitioner and same has been placed on record, therefore, without making any observation on merits of the case, the petition is disposed of with a direction to the respondent No.4 to decide the matter afresh after affording due opportunity of hearing to the petitioner. The orders passed by the Assessment Officer & First Appellate Authority are hereby quashed - Petition disposed off. Issues: Whether, in view of production of the required Form-C by the purchaser during pendency of the writ petition, the assessment and first appellate orders can be quashed and the matter remitted for fresh decision after affording opportunity to the assessee to place the Form-C on record.Analysis: The Court noted that Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 and Section 8(4) of the Central Sales Tax Act, 1956 place the obligation on the purchaser to obtain and furnish the prescribed declaration (Form-C) to the seller. The petitioner was unable to produce Form-C before the Assessing Officer because the purchaser had not provided it; however, the purchaser subsequently issued Form-C and it was placed on record during the writ proceeding. The Court observed that the Tribunal previously deciding the second appeal is not available and that, without adjudicating merits, the newly produced Form-C may materially affect the tax treatment applied by the assessing authorities.Conclusion: The assessment order and the first appellate order are quashed and the matter is remitted to the assessing authority for fresh decision after affording the petitioner an opportunity of hearing to place the Form-C and other relevant documents on record.