TaxTMI 
TaxTMI 
2008 (8) TMI 813
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...., in a nutshell, is that it is a registered dealer under the provisions of the Orissa Value Added Tax Act, 2004 (hereinafter referred to as, "the OVAT Act") bearing Registration Certificate No. 21481702909, CST (R&T) Rules, 1957 bearing Registration Certificate No. SAIC1289 and OET Act. It deals with rice huller, flour mills, hand tools, domestic grinders, belting, manually operated agricultural implements, ball bearings, etc. According to it, none of these items are manufactured in Orissa, for which, it purchases them from outside States in course of interState trade and commerce. The petitioner applied to opposite party No. 4 for supply of one book of "C" forms vide application dated April 17, 2008 (annexure 1). On April 23, 2008, O.P. No. 4 passed order to ask the petitioner to explain about non-payment of Orissa Entry Tax Act, OVAT Act and to consider issue of ten sheets of "C" forms according to dealer's requirement. Again on April 24, 2008, CTO-O.P. No. 3 directed STO to call for an explanation from the petitioner as to why "C" forms shall not be refused to it on the ground of non-payment of entry tax on the goods purchased from outside State without issuing said ten numb....
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....ing the "C" forms are fulfilled, the assessing officer is not justified to refuse issue of "C" forms to the petitioner. In support of his contention, Mr. Lal relied on the decision of the Kerala High Court in Salvicate (Bangalore) Private Limited v. Sales Tax Officer [1998] 109 STC 543 and some other decisions. He further submitted that the goods dealt with by the petitioner being not manufactured in Orissa and the petitioner having purchased the same from outside the State of Orissa, it is not liable to pay entry tax on the purchase of those goods in view of the judgment dated February 18, 2008 of this court passed in W.P. (C) No. 6515 of 2006 (Reliance Industries v. State of Orissa [2008] 16 VST 85) and disposed of on February 18, 2008. The said judgment of the Orissa High Court is binding on all the Revenue authorities of the State. In support of the said contention, he relied on the judgment of the honourable Supreme Court in East India Commercial Co. Ltd., Calcutta v. Collector of Customs, Calcutta AIR 1962 SC 1893. He vehemently argued that the conduct of opposite party No. 3, the STO, amounts to arm-twisting method to harass the petitioner and to defy the judgment of this co....
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.... No. 6515 of 2006 (Reliance Industries v. State of Orissa [2008] 16 VST 85) disposed of on February 18, 2008? In order to deal with the first question, it is necessary to know the relevant provisions contained in the CST Act, CST (R&T) Rules and CST (O) Rules. The relevant provisions are section 8 of the CST Act, rule 12 of the CST (R&T) Rules, rule 6 of the CST (O) Rules. The relevant provisions of section 8 of the CST Act are reproduced below: "8. Rates of tax on sales in the course of inter-State trade or commerce.-(1) Every dealer, who in the course of inter-State trade or commerce,- (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government, goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be four per cent of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower. (2) The tax payable by any dealer on his turnover insofar as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling wi....
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....against prescribed forms and inter-State sale made by a dealer of one State to a registered dealer of other State of goods specified in the certificate of registration of the purchasing dealer against prescribed form. A further classification has also been made between declared goods and un-declared goods. Section 8(2) provides the general rate of tax. In the case of declared goods if the dealer failed to furnish declaration in form "C" the rate of tax shall be twice the rate applicable to the sale or purchase of such goods inside the State. In case of nondeclared goods such rate is 10 per cent of the turnover. However, if the rate applicable to sale or purchase of such goods inside the appropriate State is higher than 10 per cent, the rate of tax under the CST Act would be such higher rate. We are here concerned with the sales effected by a registered dealer of one State to a registered dealer of other State as prescribed under section 8(1)(b) of the Act. In order to avail concession under clause (b) of section 8(1), the sale must be of goods specified in registration certificate of the purchasing registered dealer or packing materials, etc., and the purchasing goods must have bee....
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....to a dealer who has failed to comply with the order demanding security or additional security, as the case may be, under sub-rule (2) of rule 3 of these Rules. The notified authority shall supply to the dealer applying in this behalf such number of blank declaration forms as appears to him to be reasonable at any one time: Provided further that no second or subsequent supply of declaration forms shall be made to any such dealer unless he furnishes to the notified authority a true copy of the accounts, certified by him under his signature, of the forms last supplied to him as maintained in form V referred to in clause (d): Provided further that for the purpose of this sub-rule the application shall be signed by any person who is authorised to sign a return under rule 11. . . . " Rule 6 of the CST (O) Rules provides that a registered dealer shall obtain 25 blank declaration forms on application affixed with fee of Rs. 21 in court fee stamps. The first proviso says a notified authority may refuse issue of declaration forms to a dealer who has failed to comply with the order demanding security or additional security or as the case may be, under sub-rule (2) of rule 3 of the....
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....hat there is no provision in the Act which authorises the Commercial Tax Officer to refuse to provide the assessee with "C" forms. If the assessee misused the "C" form, that will be punishable under section 10 of the Central Act. Beyond that, it had no effect, not even in tax. The Commercial Tax Officer was not constituted as a policeman to regulate and conduct the assessee along the virtuous path. Nambiar's case (W.P. Nos. 1379 and 1380 of 1967 and 840 of 1971, decided on April 27, 1971) has been referred in Chanda Paints (Madras) Ltd. v. Commercial Tax Officer [1986] 61 STC 335. In the present case, the petitioner has paid Rs. 21 for 25 numbers of blank forms and also furnished a true copy of the account of "C" forms last furnished. In addition to those it has also furnished a list showing detail particulars of selling registered dealers to whom "C" forms are to be supplied. It is not the case of the Revenue authority that the petitioner has failed to comply with the order demanding security or additional security, as the case may be. It is also not the case of the Revenue that the petitioner failed to furnish true copy of the accounts certified by him under his ....
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....copies at a time. While exercising this discretion he must be very careful and should not act in a manner which will hamper any registered dealer's business. This discretionary power has to be exercised judicially and in our opinion it should be exercised for the reasons to be recorded in writing. The action of the authority should be fair and transparent. Needless to say that action of the authority should not be such that it will hamper the free-flow of the inter-State trade. When exercising power under rule 6 of the CST (O) Rules in the matter of issuing "C" form it would not be appropriate for the authority to delve into the aspect whether entry tax is payable on the goods brought from outside the State. While issuing form "C" or even other statutory form there is no scope for analysing controversial issues. Such controversies should be determined and adjudicated at the time of regular assessment. The Andhra Pradesh High Court in Siva Oil Rotary v. Commercial Tax Officer II [2005] 142 STC 129 held that where the only condition prescribed for issue of way-bills of payment of costs and payment of tax is not one of the conditions prescribed, in that event if any tax is due ....
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....ld be comparatively low . . ." This being the reason for enacting section 8 of the CST Act, which in our view is in public interest, the Revenue authorities should not act in any manner so as to defeat the very purpose for which section 8 of the CST Act was enacted. The statute provides that "C " form should be issued under a particular manner. It must be strictly adhered to. If a dealer fulfils the conditions required under the statute for getting "C" form or any other statutory forms, the Revenue authorities are bound to issue such forms. They cannot refuse to issue "C" forms or other statutory forms on some plea or other. It is well-settled position of law that what cannot be done "per directum is not permissible to be done per obliquum", meaning thereby, whatever is prohibited by law to be done, cannot legally be effected by an indirect and circuitous contrivance, on the principle of "quando aliquid prohibetur, prohibetur et omne per quod devenitur ad illud". In the present case, it is further found that the authorities are not issuing required number of "C" forms on irrelevant ground. The "C" forms are issued in piecemeal manner without any justification. Such unwarranted d....
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....event the Revenue authorities to take necessary action against unscrupulous and fraudulent dealers, who are involved in clandestine business and defraying Government Revenue by misutilising the statutory forms which are more grievous offences than those that are enumerated in section 10 of the CST Act. In those cases, before stopping supply of declaration form, the Revenue authority may cancel the registration certificates of fraudulent dealers for the reason(s) stated in the concerned statutes after giving reasonable opportunity of being heard to such registered dealers. So far as the second question is concerned, the law is well-settled that the judgment of the High Court is binding on all concerned parties. The honourable Supreme Court in East India Commercial Co. Ltd. AIR 1962 SC 1893 held that: ". . . The law declared by the highest court in the State is binding on authorities or Tribunals under its superintendence, and that they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. . ." The honourable apex court in the case of Union of India v. Kamlakshi Finance Corporation Ltd. AIR 1992 SC 711, in paragrap....