TaxTMI 
TaxTMI 
2017 (12) TMI 671
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.... (ii) Whether Section 9(2) of the Central Sales Tax Act, 1956 read with Rule 5(6) and 5(10) of Central Sales Tax (Pondicherry) Rules, 1967 is applicable to the petitioner's case that where, for any reason, the whole or any part of the turnover of business of a dealer has been assessed at a rate lower than the rate at which it is assessable, the assessing authority may, at any time within a period of five years from the expiry of the year to which the turn relates, re-assess the tax? (iii) Whether the assessing officer has got power to over look the provision of the Central Sales Tax Act, 1956 and Central Sales Tax (Pondicherry) Rules, 1967 is unsustainable in law? (iv) Whether imposition of the additional tax @ 10% for non-submission of Form 'C' for CST sales made for the year 2004-2005 and 2005-06 is sustainable in law? 4. Brief facts leading to the revisions are that the Petitioner is a manufacturing unit of Pressure Die Castings and Aluminium Alloys with Tax Identification Number 34480004564 and Central Sales Tax Act Number 34480004564 dated 16.04.2008 under the Puducherry Value Added Tax Act, 2007 and Central Sales Tax Act, 1956 registered on ....
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.... Assistant Commissioner, Puducherry by paying 12.5% of the disputed tax raising all grounds raised by the Petitioner before the Assessing Officer. The appellate authority, going through the records and submissions made by the Petitioner, passed a common order dated 11.07.2016, dismissing the appeals. 10. As against the same, petitioner filed Tax Appeals before the Sales Tax Appellate Tribunal, Puducherry in Tax Appeal No.14 and 15 of 2016. It is the case of the petitioner that the Appellate Tribunal, without considering the grounds raised by the petitioner confirmed the findings of the respondent by his order dated 11.07.2016. The petitioner has assailed the findings of the Appellate Tribunal on the following grounds: A. The impugned orders of the Sales Tax Appellate Tribunal confirming the orders of the Addl. Deputy Commercial Tax Officer (lAC), Puducherry and the Appellate Assistant Commissioner, Puducherry and the respondent herein is totally incorrect, without application of mind and is against the provisions of law. B. The Appellate Tribunal ought to have seen that all the Original C Forms were filed by the petitioner at the time of completion of Assessmen....
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....and submitted "C" Forms for the entire CST sales at the time of assessment for the year 2004-2005 and 2005-2006. The assessing officer has not passed the order and misplaced C Forms and again issued notice to submit "C" Forms for CST sales made for the year 2004-2005 and 2005-2006, and has sought further time for filing the duplicate forms for the inter-state turnover value of Rs. 54,46,149/-. 13. The dealer had been closely following the matter with the customers for submission of forms and that the dealer was unable to furnish the forms due to various genuine reasons beyond his control which had been expressed to the assessing authority including administrative reasons of the issuing government authority and all the above had contributed to the inability of the dealer in submitting C-Forms to the assessing authority, before passing the order. 14. The appellate authority erred in upholding the assessment order as it is only fair and proper to consider the duplicate forms submitted before the appellate authority. The petitioner has relied on the following decisions: (1) State of Tamil Nadu v. Arulmurugan and company [1982 51 STC 381 (Mad)], (2) State of AP v....
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.... for certain interstate transactions and failed to furnish Declaration Forms for the remaining transactions. Therefore notices were issued to the Petitioner with a direction to produce relevant Declaration Forms for completion of assessment. 18. Despite several notices issued and even after a lapse of nine years, the Petitioner has not responded and submitted the required declaration forms. Thereafter, pre-assessment notices dated 12.11.2015 were issued to the above said assessment year to the petitioner with the proposed higher rate of tax, instead of concessional rates or exempted rates as claimed by the petitioner. Further, the petitioner was also directed to file his objection if any on or before 19.11.2015. In response to the pre-assessment notice, the petitioner sought for extension of time for submitting declaration forms vide his letter dated 21.11.2015. As requested the assessing officer has extended time upto 07.12.2015 to produce the declaration Forms. 19. Even though, sufficient time was given for furnishing the declaration forms, but till the date of finalizing the assessment order, the Petitioner has not furnished the required forms for claiming concession/ exem....
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....d by the dealers for the interstate effected at the concessional rates passed the assessment order imposing higher rate of tax for non-production of C-Forms. Further, the request of the petitioner to accept duplicate part of the C-Form cannot be entertained as law mandates that assessment of interstate sales turnover at concessional rate can be made only on submission of original portion of the C-Forms. Therefore the Ground (C), (D) and (E) are liable to be rejected. 24. As regards limitation, the respondent has contended that Rule 5(6) of the Central Sales Tax (Pondicherry) Rules 1967 states that after the end of the year the assessing authority shall after scrutiny of accounts assess under a single order the tax or taxes payable under the Act for the preceding year or for the year to which the return submitted relates. The said Rule only says that an order has to be passed after the close of the year and it does not specify any time frame. The CST assessment order passed for the years 2004-2005 and 2005-2006 respectively were passed, after the close of the year and does not contravene the said Rule. Rule 5(10) of the Central Sales Tax (Pondicherry) Rules 1967 speaks about reas....
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.... Assessing Authority. On the contrary the petitioner at para 6 of the grounds of appeal filed before the Appellate Assistant Commissioner (CT) and at para 2, 4 and 6 of the grounds of appeal filed before the Sales Tax Appellate Tribunal, Puducherry had stated that if time was granted he would submit the C forms and further stated that Assessing Authority had not appreciated the efforts taken to obtain the C forms from the consumer. Therefore the claim of the petitioner that he had already submitted the C forms is contrary to his submission made before the Appellate Assistant Commissioner (CT) and the Sales Tax Appellate Tribunal (STAT) and hence the averment is false. 27. The Assessment orders dated 06.01.2016 for the years 2004-2005 and 2005-2006 were passed after granting adequate opportunity. The petitioner was granted nine years time and therefore the contentions made by the petitioner that the Appellate Tribunal erred in upholding the assessment order, which had not granted time is contrary to facts. 28. Furnishing original C forms is mandatory and not a mere procedural aspect to support the genuineness of the transactions and does not alter the character of the transact....
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.... 2. Name of the Assessee(s) : PONDY DIE CASTINGS 3. Nature of the Business : Manufacturers of Aluminium and Zinc Rough Castings 4. Place of Business : A1 & A2 Industrial Estate Sedarapet, Puducherry 5. Turnover reported Total Turnover : Rs.1,03,96,233.00 Taxable Turnover : Rs.1,01,03,359.00 6. Turnover Determined Total Turnover : Rs.1,05,82,118.00 Taxable Turnover : Rs.1,05,82,118.00 7. Document produced in support Form : Form XVII and Declaration submitted by the dealer Note: An appeal against this order can be filed before the Appellate Assistant Commissioner within 30 days of receipt of this order. M/s PONDY DIE CASTINGS, Puducherry, Manufacturers of Aluminium and Zinc Rough Castings at A1 & A2 Industrial Estate, Sedarapet, Puducherry have reported in their Returns a Total and Taxable turnover of Rs. 10582118.00 and Rs. 10289244.00 claiming exemption on a turnover of Rs. 292874.00 in the annual return in Form 1 filed under the CST Act 1956 for the year 2005-06. The details of the Turnover Reported is as follows:- Tax Period Total Turnover reported Taxable Turnover reported Apr....
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....er dated 21.11.2015. The dealer was given further extension of time up to 07/12/2015 to produce the declaration form. Even after considering their request, and reasonable opportunity been given and further extension of time granted to the dealer, they have not turned up and not produced any further forms in support of their claim of connectional rate of tax. As the assessment cannot be prolonged further, and the dealer had more than 10 years to produce the C Forms, the proposition of tax as per Notice is hereby confirmed and the dealer is finally assessed as follows: Sl. No. Item Turnover Rs. Rate of Tax Rs. Output Tax Rs. 1 Sale of Aluminium and Zinc Rough Castings supported by Form-C @ 1% 4843095.00 1% 48431.00 2. Sale of Aluminium and Zinc Rough Castings not supported by Form-C taxable @ 10% 5446149.00 10% 544615.00 3. Exports not supported by Documents @ 10% 292874.00 10% 29287.00 Total Total Turnover Proposed : Rs.10582118/- Taxable Turnover Proposed : Rs.10582118/- Exempted Turnover Proposed : Nil Tax Due : Rs.622333/- Tax Paid ....
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....the total Turn Over of Rs. 69,37,400/- and issued a demand notice dated 06.01.2016 demanding balance tax amount of Rs. 3,87,374. For the returns filed for the assessment year 2005-2006, imposed total tax of Rs. 6,22,333/- on the total Turn Over of Rs. 1,05,82,118/- and issued a demand notice dated 06.01.2016 demanding balance amount of Rs. 5,05,228/-. For the returns filed for the assessment years 2004-2005 and 2005-2006, in time, pre-assessment notices have been issued only in the year 2015. As per Section 2(k) of the Central Sales Tax Act, 1956, "year" in relation to a dealer, means the year applicable in relation to him under the general sales tax law of the appropriate State, and where there is no such year applicable, the financial year. 33. Section 8 of the Central Sales Tax Act, 1956, deals with the rates of tax on sales in the course of inter-state trade or commerce and the same reads as follows:- "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, sells to a registered dealer goods of the description referred to in sub-section (3); shall be liable to pay tax under this Ac....
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....ty. Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit. 34. Section 9 of the Central Sales Act, 1956 speaks about levy and collection of tax and the same is extracted here under: "9. Levy and collection of tax and penalties. (1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provision of sub-section (2), in the State from which the movement of the goods commenced: 3 [Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods and being also a sale which does not fall within sub-section (2) of section 6, the tax shall be levied and collected (a) where such subsequent sale has been effected by a registered dealer, in the State from which the registered dealer obtained or, as the cas....
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....the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law.] (2B) If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of such tax and all the provisions relating to due date for payment of tax, rate of interest for delayed payment of tax, of the general sales tax law of each State, shall apply in relation to due date for payment of tax, rate of interest for delayed payment of tax, and assessment and collection of interest for delayed payment of tax under this Act in such States as if the tax and the interest payable under this Act were a tax and an interest under such sales tax law.] (3) The proceeds in any financial year of any tax, 4 [including any interest or penalty] levied and collected under this Act in any State (other than a Union Territory) on behalf of the Government of India shall be assigned to the State and sha....
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...., 31st December and 31st March as the case may be, in a financial year. 37. Rule 5(6) of the of the Central Sales Tax (Pondicherry) Rules, 1967 reads as hereunder: "After the close of the year the assessing authority shall after such scrutiny of the accounts and after such enquirq as he considers necessary satisfy himself that the return or returns filed are correct and complete and finally assess under a single order the tax or taxes payable under the act for the preceding year or for the year to which the return submitted relates, as the case may be" 38. Rule 5 (10) of the Central Sales Tax (Pondicherry) Rules, 1967 reads as hereunder: "Where, for any reason, the whole or any part of the turnover of business of a dealer has been assessed at a rate lower than the rate at which it is assessable, the assessing authority may, at any time within a period of five years from the expiry of the year to which the return relates, re-assess the tax due after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such re-assessment." 39. Rule 12(7) of the Central Sales Tax (Registration and Turnove....
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....y and the words are susceptible of another meaning, the Court may adopt the same. But if no such alternative construction is possible, the Court must adopt the ordinary rule of literal interpretation. In the present case, the literal construction leads to no apparent absurdity and therefore, there can be no compelling reason for departing from that golden rule of construction. (iv) In Poppatlal Shah v. State of Madras reported in AIR 1953 SC 274, the Hon'ble Supreme Court held that, It is settled rule of construction that to ascertain the legislative intent all the constituent parts of a statute are to be taken together and each word, phrase and sentence is to be considered in the light of the general purpose and object of the Act itself. (v) What is the spirit of law, Hon'ble Mr. Justice S.R.Das in Rananjaya Singh v. Baijnath Singh reported in AIR 1954 SC 749, said that, The spirit of the law may well be an elusive and unsafe guide and the supposed spirit can certainly not be given effect to in opposition to the plain language of the Sections of the Act. (vi) In Hari Prasad Shivashanker Shukla v. A.D.Divelkar reported in AIR 1957 SC 121, the Hon'ble Apex Court....
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....t is said, relying upon certain passages in Maxwell on the Interpretation of Statutes, at p, 68, and in Crawford on "Statutory Construction' at p. 492, that it is the duty of the Judge "to make such construction of a statute as shall suppress the mischief and advance the remedy," and for that purpose the more extended meaning could be attributed to the words so as to bring all matters fairly within the scope of such a statute even though outside the letter, if within its spirit or reason. But both Maxwell and Crawford administered a caution in resorting to such a construction. Maxwell says at p.68 of his book: "The construction must not, of course, be strained to include cases plainly omitted from the natural meaning of the words." Crawford says that a liberal construction does not justify an extension of the statute's scope beyond the contemplation of the Legislature. The fundamental and elementary rule of construction is that the words and phrases used by the Legislature shall be given their ordinary meaning and shall be constructed according to the rules of grammar. When the language is plain and unambiguous and admits of only one meaning, no q....
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....fullest manner the policy and object of the legislature. The paramount object, in construing penal as well us other statutes, is to ascertain the legislative intent and the rule of strict construction is not violated by permitting the words to have their full meaning, or the more extensive of two meanings, when best effectuating the intention. They are indeed frequently taken in the widest sense, sometimes even in a sense more wide than etymologically belongs or is popularly attached to them, in order to carry out effectually the legislative intent, or, to use Sir Edward Cole's words, to suppress the mischief and advance the remedy. (xii) In Commissioner of Sales Tax v. M/s.Mangal Sen Shyamlal reported in 1975 (4) SCC 35 = AIR 1975 SC 1106, the Hon'ble Apex Court held that, "A statute is supposed to be an authentic repository of the legislative will and the function of a court is to interpret it "according to the intent of them that made it". From that function the court is. not to resile. It has to abide by the maxim, ut res magis valiat quam pereat , lest the intention of the legislature may go in vain or be left to evaporate into thin air." (xiii) In C.I.T., Madras....
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.... this well-laid principle is that it cannot be called in aid to alter the meaning of what is of itself clear and explicit. Lord Coke laid down that: 'it is the most natural and genuine exposition of a statute, to construe one part of a statute by another part of the same statute, for that best expresseth meaning of the makers' (Quoted with approval in Punjab Breverages Pvt. Ltd. v. Suresh Chand [(1978) 3 SCR 370 : (1978) 2 SCC 144 : 1978 SCC (L&S) 165]). (xvii) In Nyadar Singh v. Union of India reported in AIR 1988 SC 1979, the Hon'ble Supreme Court observed that ambiguity need not necessarily be a grammatical ambiguity, but one of the appropriateness of the meaning in a particular context. (xviii) It is a well settled law of interpretation that when the words of the statute are clear, plain or unambiguous, ie., they are reasonably susceptible to only one meaning, the Courts are bound to give effect to that meaning irrespective of consequences. Reference can be made to the decision of the Apex Court in Nelson Motis v. Union of India reported in AIR 1992 SC 1981. (xix) In M/s.Oswal Agro Mills Ltd., v. Collector of Central Excise and others reported in 1993 Supp ....
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....on can hardly be said to arise. The decision in a case calls for a full and fair application of particular statutory language to particular facts as found. It is a corollary to the general rule of literal construction that nothing is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the Legislature intended something which it omitted to express. A construction which would leave without effect any part of the language of a statute will normally be rejected. (xxii) In Narendra H.Khzurana v. Commissioner of Police reported in 2004 (2) Mh.L.R. 72, it is held that it must be noted the proper course in interpreting a statute in the first instance is to examine its language and then ask what is the natural meaning uninfluenced by the considerations derived from previous state of law and then assume that it was property intended to leave unaltered. It is settled legal position, therefore, that the Courts must try to discover the real intent by keeping the direction of the statute intact. (xxiii) In Nathi Devi v. Radha Devi Gupta reported in AIR 2005 SC 648, the Hon'ble Apex Court held that, The interpretation function of the Co....
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.... be approached for clarification, the legislature cannot be approached as the legislature, after enacting a law or Act, becomes functus officio so far as that particular Act is concerned and it cannot itself interpret it. No doubt, the legislature retains the power to amend or repeal the law so made and can also declare its meaning, but that can be done only by making another law or statute after undertaking the whole process of law-making. 14. Statute being an edict of the legislature, it is necessary that it is expressed in clear and unambiguous language..... 15. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to innovate or take upon itself the task of amending or altering the statutory provisions. In that situation the judges should not proclaim that they are playing the role of a lawmaker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased. This can be vouchsafed by an alert recognition of the necess....
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....is capable of more than one meaning, the Court would attempt to resolve the ambiguity in a manner consistent with the purpose of the provision, having regard to the great consequences of the alternative constructions. (xxviii) In Adamji Lookmanji & Co. v. State of Maharastra reported in AIR 2007 Bom. 56, the Bombay High Court held that, when the words of status are clear, plain or unambiguous, and reasonably susceptible to only meaning, Courts are bound to give effect to that meaning irrespective of the consequences. The intention of the legislature is primarily to be gathered from the language used. Attention should be paid to what has been said in the statute, as also to what has not been said. (xxix) In State of Haryana v. Suresh reported in 2007 (3) KLT 213, the Hon'ble Supreme Court held that, One of the basic principles of Interpretation of Statutes is to construe them according to plain, literal and grammatical meaning of the words. If that is contrary, to or inconsistent with any express intention or declared purpose of the Statute, or if it would involve any absurdity, repugnancy or inconsistency, the grammatical sense must then be modified, extended or abridged,....
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....a determinative factor of the legislative intent. If the language of the enactment is clear and unambiguous, it would not be proper for the courts to add any words thereto and evolve some legislative intent, not found in the statute. Reference in this regard may be made to a recent decision of this Court in Ansal Properties & Industries Ltd. v. State of Haryana [2009 (3) SCC 553] 180. Further, it is a well-established principle of statutory interpretation that the legislature is specially precise and careful in its choice of language. Thus, if a statutory provision is enacted by the legislature, which prescribes a condition at one place but not at some other place in the same provision, the only reasonable interpretation which can be resorted to by the courts is that such was the intention of the legislature and that the provision was consciously enacted in that manner. In such cases, it will be wrong to presume that such omission was inadvertent or that by incorporating the condition at one place in the provision the legislature also intended the condition to be applied at some other place in that provision. (xxxiv) In Satheedevi v. Prasanna reported in (2010) 5 SCC 62....
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....lete, so as to change the structure and contents. A court as an interpreter cannot alter or amend the law. It can only interpret the provision, to make it meaningful and workable so as to achieve the legislative object, when there is vagueness, ambiguity or absurdity. The purpose of interpretation is not to make a provision what the Judge thinks it should be, but to make it what the legislature intended it to be." 41. It is well settled that Tax Laws have to be given strict construction and interpretation. Reference can be made to few decisions. (i) It is said that tax and equity are strangers, vide Partington v. Attorney General (1869) LR 4 HL 100 Lord Cairns, expressed thus: "If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind. On the other hand if the Court seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be". (ii) The principle of strict interpretation of taxing statutes was best enunciated by Rowlatt, J., in Cape Brady Syndicate v. I....
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....antage to the subject; the subject cannot be taxed unless he comes within the letter of the law and the argument that he falls within the spirit of the law cannot avail the department." (viii) In CIT v. Madho Prasad Jatia reported in 1976 (4) SCC 92, the Hon'ble Apex Court held that there could be no consideration of equity if the language of the provision was plain and clear, but where it was not, and two interpretations were possible, the one in consonance with equity and fairness should be preferred. (ix) In Mathuram Agrawal Vs. State of Madhya Pradesh, reported in (1999) 8 SCC 667, the Hon'ble Supreme Court held as follows: "The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language....
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....turns submitted for the subsequent years from 2006-07 onwards, have been assessed and orders passed. Rule 5(6) of the Central Sales Tax (Pondicherry) Rules, 1967 states that after the closure of the year, the assessing officer shall after such scrutiny of the accounts and after such enquiry as he considers necessary satisfy himself and complete and finally assess under a single order the tax or taxes payable under the Act for the preceding year or for the year to which the returns submitted relates, as the case may be. 43. In a given case, the assessee would not have registered, as a dealer, under the provisions of Central Sales Tax Act, 1956 and the department may initiate proceedings, for levy of tax and such other action, as the case may be, and in response to the same, the dealer may offer his explanation or file returns. In the instant case, it is the case of the revenue that returns were provisionally admitted. 44. The words, "after the closure of the year", and tax or taxes payable under the Act "for the preceding year" or for the years, for which, returns were submitted, casts a duty on the assessing authority to pass an order, in the following year, for which, return....
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....ssment has to be done and orders passed and not at any time, as submitted. 48. Merely because the assessee has not submitted Form 'C' declarations within time, that would not empower the Assessing Officer to pass the order of assessment at any time and in the case on hand, a decade after the submission of the returns for the assessment years 2004-2005 and 2005-2006. Contention of the respondent that no time limit has been prescribed in the statute for the first assessment and Rule 5(6) of Pondicherry General Sales Tax Rules, 1957 only states that an order of assessment has to be passed after the closure of year and that such assessment order can be passed at any time, cannot be accepted for the reason that Tax Laws have to be interpreted in strict sense and no liberal construction and interpretation, are permissible. 49. As per Section 2(k) of the Central Sales Tax Act, 1956, "year", in relation to a dealer, means the year applicable in relation to him under the General Sales Tax Law of the appropriate state and where there is no such year applicable, the financial year. As per Section 2(u) of the then Pondicherry General Sales Tax Act, 1967 "year" means, the financia....
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.... 13. We have considered the submissions made by the parties. The settled principles of interpretation are that the court must proceed on the assumption that the legislature did not make a mistake and that it did what it intended to do. The court must, as far as possible, adopt a construction which will carry out the obvious intention of the legislature. Undoubtedly if there is a defect or an omission in the words used by the legislature, the court would not go to its aid to correct or make up the deficiency. The court could not add words to a statute or read words into it which are not there, especially when the literal reading produces an intelligible result. The court cannot aid the legislature s defective phrasing of an Act, or add and mend, and, by construction, make up deficiencies which are there. (iii) In Institute of C.A. of India v. Ajit Kumar Iddya reported in AIR 2003 Kant. 187, the Karnataka High Court held that, So far as the cardinal law of interpretation is concerned, it is settled that if the language is simple and unambiguous, it is to be read with the clear intention of the legislation. Otherwise also, any addition/subtraction of a word is not permissible. In o....