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2018 (1) TMI 553
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....ionist, a registered dealer, that by virtue of certificate of registration granted to it in Form 'B' it is entitled to purchase of goods on concessional rate of tax has been turned down. Orders challenged in the Commercial Tax Revision are also the subject matter of challenge in Writ Tax No.762 of 2017, filed by M/s CG Power and Industrial Solutions Ltd. (hereinafter referred to as the 'Writ Petitioner'). Writ Petitioner was awarded contract by UPPTCL for construction of 765 KV sub-station, on turn key basis, as part of its Power Transmission Infrastructure. A declaration is sought in the writ petition that UPPTCL is entitled to be issued Form 'C' for the financial year 2010-11 to 2016-17, for the purchases to be effected for the contract work specified in Form 'B' at Unnao and Sirathu. An alternative prayer is also made to direct the UPPTCL to pay differential amount of tax, together with interest, in case it is found not entitled to Form 'C'. 2. The Writ Petition (Tax) No.762 of 2017 has been connected with Commercial Tax Revision No.269 of 2017, vide order passed in revision on 15.11.2017. Both the matters are therefore listed together ....
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....and material, Electrical Material Equipment, Transformer, Apparatus and Parts only. (c) for use in mining; XXX (d) for use in the generation or distribution of electricity or any other form of power. Electrical material equipments, parts and apparatus, transformer and transformer oil only. (e) for use in the packing of goods for sale/resale. XXX The dealer manufactures, processes, or extracts in mining, the following classes of goods or generates or distributes the following form of power, namely: (A) 765 KV Electric Sub-station for the work of electricity transmission. The dealers' year for the purpose of accounts runs from April to March The dealer has no additional place of business/has additional place(s) of business as stated below: (a) In Uttar Pradesh - DahiChowki, Unnao (b) In other States - XX The dealer keeps warehouses at the following places within the State of registration: (1) DahiChowki Unnao This certificate will be valid w.e.f. 27.10.10 until its cancelled. Sd/- Dr. A.K. Kanaujia Assistant Commissioner Commerci....
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....;या जाता है। आपके द्वारा प्रान्तीय एवं केन्द्रीय पंजीयन पूर्णतः पावर ट्रान्समिशन के लिए प्राप्त किया गया है। फार्म सी प्राप्त करने हेतु आवेदन कर्ता एक सरकारी निगम है जिसके द्वारा पावर हाउस से विद्युत प्&#....
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....66;र्य हेतु फार्म-सी जारी किया जाना विधिक रुप से उचित नहीं है।" The assessing authority held that the UPPTCL is neither a manufacturer nor is a trader, and as such, is not covered within the definition of 'dealer' under the Act of 1956. The definition of 'dealer' under section 2(b), provision contained under section 8(3)(b) as well as rule 13 of 1957 Rules has been referred to in order to hold that the claim for issuance of Form 'C' is not covered under the rules. The assessing authority ultimately concluded as under:- "उपर्युक्त व्याख्या से स्पष्ट है कि पावर जनरेशन, पावर ट्रान्....
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....#2367;रुद्ध रियायती दर से माल का आयात करने की अनुमति दिया जाना न्याय संगत नहीं है। अतः फार्म-सी प्राप्त करने हेतु दिया गया प्रार्थना पत्र अस्वीकार किया जाता है। आदेश की प्रति व्यापारी को सूचनार्थ भेजा जाय।" 5. Revisi....
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....s the issuance of Form 'B' to the UPPTCL insofar as concessional tax under section 8(4) is held leviable for the goods specified in the form. The stand taken in the counter affidavit filed in writ petition is followed and reiterated by Sri A.C. Tripathi, learned Standing Counsel, in the revision as well. 8. Sri Kavin Gulati, learned senior counsel appearing for the writ petitioner has placed the statutory scheme under the Act of 1956, as well as Rules of 1957, in order to contend that once Form 'B' has been issued to a dealer registered under the Act of 1956, the inter-state sales of goods and materials specified therein would attract levy of tax at concessional rate under section 8(4) and the authorities are obliged to issue Form 'C' for the purpose. It is also stated that so long as the Form 'B' subsists and is not cancelled, for which only limited grounds otherwise exist and are not attracted otherwise in this case, the authorities cannot go behind the declarations made in Form 'B' while issuing Form 'C'. It is contended that it would be at the stage of final assessment that the authorities may at best examine as to whether Form....
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....einbefore mentioned or not, who carries on the business of buying, selling, supplying or distributing, goods belonging to any principal whether disclosed or not; and (iii) An auctioneer who carries on the business of selling, or auctioning goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal. Explanation 1-Every person who acts as an agent, in any State, of a dealer residing outside that State and buys, sells, supplies, or distributes, goods in the State or acts on behalf of such dealer as- (i) A mercantile agent as defined in the Sale of Goods Act, 1930 (3 of 1930) or (ii) An agent for handling of goods or documents of title relating to goods, of (iii) An agent for the collection or the payment of the sale price of goods or as a guarantor for such collection or payment, and every local branch or office in a State of a firm registered outside that State or a company or other body corporate, the principal office or headquarters whereof is outside that State, shall be deemed to be a dealer for the purposes of....
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.... of a Government, by an officer duly authorised by that Government, or, in the case of any other association of individuals by the principal officer managing the business, and (b) verified in the manner provided in the said Form 'A'. (2) Where a dealer has more than one place of business within a State, he shall make a single application in respect of all such places, name in such application one of such places as the principal place of business for the purposes of these rules and submit such application to the notified authority specified in respect of the principal place of business so named: Provided that any place so named shall not in any case be different from the place, if any, declared by him to be the principal place of business, by whatever name called, under the general sales tax law of the State." 14. It would be appropriate at this stage to take note of Form 'A' inasmuch as it contemplates disclosure by the applicant of its business and also the goods or classes of goods that are required to be purchased by the dealer in the course of inter-state trade or commerce. Clause 16 of Form 'A' which is referable to rule 3 ....
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.... (4) the provisions of sub-section (1) is to apply only if the dealer selling the goods furnishes to the prescribed authority, in the prescribed manner, a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. Section 8(1), (2), (3) and (4) of the Act of 1956 are reproduced:- "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 Act, which shall be one 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: Provided that the Central Government may, by notification in the Official Gazette, reduce the rate of tax under this sub-section. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-state trade or comm....
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....t been amended or cancelled, in terms of sub-section (4) of section 7 of the Act. In such eventuality, the registered dealer (UPPTCL) is required to provide declaration, dully filled and signed by it to the selling dealer (writ petitioner) containing the prescribed particulars in prescribed form. Such declaration and certificate has to be made in form 'C' appended to the Rules of 1957. In its absence, normal rate of tax would have to be paid by the selling dealer. This would be impermissible once the inter-state sale is covered by sub-section (1) and (3) of section 8 and a certificate is already issued under Form 'B'. 18. Issuance of Form 'C' is denied in the instant case for the reasons that inter-state sale of goods and material is not covered under section 8(3) of the Act. The question to be considered therefore is as to whether the authority concerned is entitled to examine correctness of the disclosures made in Form 'A' on the basis of which certificate in Form 'B' has already been issued at the time of issuing Form 'C' ? It has also to be seen as to whether 'power transmission' is covered within the ambit and scope....
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.... question the correctness of such recitals contained in the certificate in Form 'B' or else the very premise and object of issuing Form 'B' would be frustrated. 20. In State of Madras vs. Radio and Electricals, AIR 1967 SC 234, such an issue came to be examined by the Apex Court. It was clearly observed that once certificate of registration is issued in Form 'B', it is not open for the officer to deny its benefit on the ground that goods specified cannot be used by the purchasing dealer for the purpose of its business. Para 13 to 15 of the judgment is reproduced:- "13. The authority issuing the certificate under Rule 5(1), as expressly stated in the rule, has, before issuing a registration certificate, to be satisfied after making such enquiry as it thinks necessary that the particulars contained in the application are correct and complete. The enquiry would obviously be made in the light of the nature of the business and goods which are likely to be needed either for resale, or for use in the manufacture of goods for sale, or for use in the execution of contracts. Satisfaction which is contemplated by r. 5 is objective, and may be arrived at upo....
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....er arising out of multiple taxation has, in respect of sales of declared goods which have special importance in inter-State trade or commerce, and other classes of goods which are purchased at an intermediate stage in the stream of trade or commerce, prescribed low rates of taxation, when transactions take place in the course of inter-State trade or commerce. Indisputably the seller can have in these transactions no control over the purchaser. He has to rely upon the representations made to him. He must satisfy himself that the purchaser is a registered dealer, and the goods purchased are specified in his certificates but his duty extends no further. If he is satisfied on these two matters, on a representation made to him in the manner prescribed by the Rules. and the representation is recorded in the certificate in Form 'C' the selling dealer is under no further obligation to see to the application of the goods for the purpose for which it was represented that the goods were intended to be used. If the purchasing dealer misapplies the goods he incurs a penalty under section 10. That penalty is incurred by the purchasing dealer and cannot be visited upon the selling dealer.....
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....aration to the selling dealer, the selling dealer becomes on production of the certificate entitled to the benefit of S. 8(1). It is of course open to the sales tax authority to satisfy himself that the goods which are purchased by the purchasing dealer under certificate in Form 'C' are specified in the purchasing dealer's certificate in Form 'B'. Observation of the High Court that the selling dealer may not enquire whether the requirement is not within the certificate of re- gistration of the purchasing dealer is not accurate. But whether the goods specified in the registration certificate in From 'B' can be used for the purpose is not for the selling dealer to determine. That is a matter which has already been determined by the notified authority issuing the certificate of registration." A similar view has been taken in Chunni Lal Parshadi Lal vs. Commissioner of Sales, U.P. Lko. (1986) 2 SCC 501. Para 31 to 33 of the judgment is also reproduced:- "31. This Court further observed that if the purchasing dealer held a valid certificate specifying the goods which were to be purchased and furnished the required declaration to the selling dealer....
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....e of issuance of Form 'C' and observed as under:- "7. Further, in the case Larsen and Toubro Limited v. C.T.O.(85 S.T.C. 422), a similar prayer for issue of "C" forms was made. The only difference is that in that case, the claim was made prior to purchase of the goods. In that case, the Supreme Court has held that, " .....in my view, the petitioners are entitled to have themselves registered as dealers under Section 7(2) and consequently are entitled to the supply of "C" forms for use in their purchase of goods in the course of inter-State sale or trade or commerce at the concessional rate. The further question whether the goods have been rightly purchased for any one of the approved and permitted purposes and whether there was sufficient compliance or non-compliance or violation of the terms of the registration certificate or as to whether the "C" forms issued have been misused by the registered dealer shall be considered only at the subsequent and appropriate stage and in accordance with section 10-A of the Central Sales Tax Act and it would be not only premature, but inappropriate to enter into an enquiry postulated under Section 10-A even at the stage ....
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....ochloric acid was not a raw material for manufacture of radiators and that the dealer was not entitled to concessional rate of tax. The assessee's appeal was upheld by the Deputy Commissioner (appeals) and penalty was deleted. The revision and special appeal by the commercial tax officer before the Single Judge and the Division Bench of the Board respectively have failed. On reference, the High Court held as follows:- "(i) that under section 5C(1) for paying concessional rate of tax on the sale or purchase price of raw material, the following conditions were to be satisfied: (1) The purchaser should be a registered dealer, (2) the purchase should be of raw material, (3) the raw material should be for manufacture of goods in the State and (4) the goods so manufactured should be sold within the State or in the course of inter- State trade. The entry in the registration certificate issued to the dealer-assessee showed that hydrochloric acid was purchased as raw material for manufacture of the radiators and unless and until it was cancelled or modified it was binding on the department and was conclusive proof of the fact that hydrochloric acid was raw material for manufact....
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....ertificate and to come to a conclusion that to that extent the recognition certificate was incorrectly granted. If this were permitted, it would lead to confusion and chaos, because different Sales Tax Officers assessing different third parties, who had sold goods to such a dealer holding a recognition certificate, might come to different conclusions regarding the same item. Moreover, the result of allowing the assessing Sales Tax Officers to do this would be that the recognition certificate would have hardly any binding value at all and the holder of a recognition certificate might find it liable to be altered in effect in proceedings in which he would not even be heard." 27. It is also stated that the State's SLP against the CTO vs. Hindustan Radiators was dismissed by this Court which was registered as SLP (Civil) No. 1538 of 1988. 28. Thus, in view of these judgments, it was submitted that once the commodity is recorded in the registration certificate as raw material then the department cannot roll back from their stand to the Department of the assessee as the assessee has not violated any condition but acted on the belief of the Department. It was also co....
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...., (2013)61 VST 370. 28. We also find that the Deputy Commissioner committed a manifest error in rejecting the petitioner's application for issuance of Form-C, on the ground that the registration certificate has been amended. We are of the opinion that the amendment made in the registration certificate could not apply retrospectively and the order, if any, could only apply to an application filed after the amendment. Applications which are pending prior to the amendment of the registration are required to be considered as if the registration certificate had not been amended. The authority, therefore, committed a manifest error in rejecting the petitioner's application for issuance of Form-C on the ground that the certificate had been amended. The Supreme Court in M/s Sivalik Collulose Ltd., Gajraula, District Moradabad and another vs. State of U.P. and others, 1992 UPTC 1, held that the action under Section 7(4) of the Central Sales Tax Act by the authority granting the certificate of registration can only be prospectively and cannot operate retrospectively is fully applicable in the instant case." 22. Learned counsel has also invited attention of this Court to a....
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....e discussions. The Commercial Tax Authorities have been of the opinion that 'power transmission' is not covered within the express terms of section 8(3)(b) of the Act of 1956. For arriving at such an opinion the provision itself has been taken note of and construed as being limited to 'generation or distribution of electricity' alone. While taking such view the authorities have not examined the expression occurring in the statute itself. Section 8(3)(b) talks of 'generation or distribution of electricity or any other form of power'. Generation of electricity would connote production of electrical energy whereas its distribution would mean its actual supply to the end consumer of power. Transmission is the stage occurring between generation and distribution of electricity. Distribution of power would be wide enough to include transmission itself inasmuch as distribution itself cannot take place without transmission of power from its place of generation. The legislature has otherwise not confined the expression to 'generation or distribution of electricity' alone but has widened it by the use of expression 'any other form of power'. This, in my....