AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 801
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....he website of the Department to respondents no.4 and 5, vide order dated 07.12.2017, as illegal, without the authority of law and violative of Article 19(1)(g) of the Constitution of India. Prayer is also made for quashing and setting aside the communications dated 20.11.2017 and 30.11.2017 sent by the respondent no.3 to the VATO Ward-17, New Delhi, as being preposterous and not sustainable as the said communications preceded the date of cancellation of 'C' form, which was 07.12.2017. The petitioner has further prayed for declaration that the registration certificates of the respondents no.4 and 5, which were cancelled on 07.12.2017 with retrospective effect from 01.05.2017, were valid during the period when transactions were made by the petitioner and that even according to Section 16(4) of the Rajasthan Value Added Tax Act, 2003 such cancellation can only be effective from the date of the order or the hoisting of such cancellation on the portal of the department and would not come into effect retrospectively. It is also prayed to declare the communication dated 27.12.2017 sent by the respondent no.2 to the Commissioner VAT/GST, Delhi as without the authority of law and thus quash....
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....017, Delhi VAT authority was informed about cancellation of the said 'C' forms as well as the registration certificates of the respondents no.4 and 5. The registration certificates of respondents no.4 and 5 were cancelled on 07.12.2017, under Section 16(4) of the Rajasthan Value Added Tax Act, 2003 (for short, 'RVAT Act'). Hence this writ petition. Mr. Rajesh Jain, learned counsel for petitioner, argued that while sub-section (1) of Section 13 of the Act confers power on the Central Government to make Rules, sub-section (4) of Section 13 gives that power to the State Government. Section 13(3) provides that the Rules framed by the State Government should not be inconsistent with the provisions of the Act and the Rules made under sub-section (1). Sub-section (4) in clauses (a) to (j) stipulates the purposes for which the State Government can make the Rules. As per clause (e) of Section 13(4) of the Act, the State could make rules as regards, (a) the authority from whom; (b) conditions subject to which; (c) the fee subject to payment of which any form or certificate prescribed under sub-section (4) of Section 8 (as relevant in this case) may be obtained. In addition, this clause also....
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....C' forms issued to the petitioner therein. It is argued that the Central Government, while making the Rules, has not carved out any rule thereunder permitting cancellation of the declaration form. Even Section 13(1)(c) of the Act permits the Centre to make Rules providing for the cases and circumstances in which and conditions subject to which any registration granted under the Act may be cancelled. Quite contrary to the stipulations contained under Section 13(3), the respondent no.1 through the notification S.O. 50, dated 14.07.2014, introduced Rule 17(20) of the Rajasthan Rules after a gap of 57 years from the date of its introduction. No other State in their Rules has any provision permitting the State authority to make Rules providing for cancellation of 'C' form once issued to the selling dealer, which would be evident from the set of rules of other States cited during the course of hearing. On the question of cancellation of registration certificate, it is submitted that the registration certificates of the respondents no.4 and 5 have been cancelled on 07.12.2017 under Section 16(4) of the RVAT and not under Section 7(4)(b) of the Act. Registration certificate under the CST....
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....ra Vs. Suresh Trading Company - (1998) 109 STC 439 (SC) and State of Madras Vs. Radio Electricals Ltd. - (1966) 18 STC 222 (SC). It is submitted that the preliminary objection raised by the respondents no.1, 2 and 3 as regards the maintainability of the writ petition, is liable to be rejected. Since vires of Rule 17(20) of the Rajasthan Rules have been challenged, therefore, it could only be done by invoking the writ jurisdiction of this Court under Article 226/227 of the Constitution of India. The authorities appointed under the Statute are creatures of the Statute who cannot go into the validity of the provisions of the Act and the Rules. Moreover, challenge by the petitioner is also supported with the judgment of Delhi High Court in Jain Manufacturing, supra. The judgment of the Supreme Court in Commissioner of Sales Tax Vs. Shree Krishna Engg. - (2005) 2 SCC 692, relied upon by the respondents, is not applicable inasmuch as it deals with the situation where no 'C' forms have been issued and the selling dealers approached the Court for a direction to the concerned Sales Tax Department to issue of such 'C' forms. In that case the court was dealing with a situation where no C-For....
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....s. Giving a logical end to the enquiry, show-cause notices were issued to both the registered dealers by the sales tax authorities in Rajasthan. Despite notices, no one appeared and consequently the registration of the dealers were cancelled w.e.f 03.12.2014. The order cancelling the registration of the traders was never put to challenge before any of the authorities by the aggrieved parties, and thus has attained finality. The authorities at Delhi were also informed regarding the proceedings against the dealers at Rajasthan and the cancellation of their 'C' Forms. Mr. R.B. Mathur, learned counsel, submitted that the petitioner in the present case challenged validity of the Central Sales Tax Rule, 1957, even though he is not even a dealer registered in the state of Rajasthan. It is submitted that following a due inquiry, registration of two dealers, namely, M/s H&G International and M/S Saraswati Enterprise was cancelled by the assessing authority vide an order passed under Rule 17(20) of Central Sales Tax rule, 1957, read with Rule 48, Rajasthan Value Added Tax Rules, 2006 and Section 16(4) Rajasthan Value Added Tax Act, 2003. The present petitioner is a stranger to the assessmen....
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....ulatory Commission - (2015) 12SCC 611, has held that where the validity of subordinate legislation is challenged, question to be asked is whether power given to the rule making authority has been exercised for the purpose for which it was given. The Court has to examine the nature, object and scheme of the legislation as a whole to consider what is the area over which powers are conferred upon the rule making authority. However, the court has to start with the presumption that the rule is intra vire and has to be read down only to save it from being declared ultra vires in case the court finds that the above presumptions stand rebutted and the impugned Regulations are relatable to the specific provisions contained in Section 86(1)(e) of the Act. Learned Counsel further submitted that the Supreme Court very recently in the case of TVS Company V/s. State of Tamil Nadu reported in (2018) AIR (SC) 5624 has reiterated the principle that the court should be slow in the reviewing the fiscal laws and any concession claimed should be strictly in accordance with law. Mr. R.B. Mathur, learned Counsel for the respondent, submitted that the Rajasthan Value Added Act, 2003 and the Central Sales....
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.... law. The Supreme Court in State of Maharashtra Vs. Suresh Trading Company, supra, was dealing with a case in which the respondents, who were registered dealers under the Bombay Sales Tax Act, 1959, purchased goods from Sulekha Enterprises Corporation between 1st January and 31st December, 1967. It was not disputed that on the date of such sale, Sulekha Enterprises Corporation held a valid registration. The respondent on that basis claimed deduction in the turnover of sales, however, the Sales Tax Officer disallowed the same on the premise that registration of Sulekha Enterprises Corporation stood cancelled on 20.08.1967 with retrospective effect from 01.01.1967. The Bombay High Court reversed the decision of the Sales Tax Officer. The Supreme Court while affirming the decision of the Bombay High Court held as under:- "....A purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. Whatever may be the effect of a retrospective cancellation upon the selling dealer, it can have no effect upon any person who has acted upon the strength of a registration certificate when the registration was current. The argument on be....
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....y law. A registration certificate cannot be granted to a non-existent person. The fact that there have been some persons who are labelled by the department as fictitious dealers goes to show that the officers under the Act either collude with dishonest people in the field or fail to exercise due diligence and allow fraud to be practised in the commercial field. Whether it is collusion or negligence, these officers bring disrepute to the State and introduce uncertainty and lack of confidence into a true field of trust. It is high time that the State Government institutes appropriate enquiries, take such steps as are necessary to eliminate fictitious dealers from the field and also take strong action against persons connected with such matters so that there be no recurrence of it in future." The Supreme Court in State of Madras Vs. Radio Electricals Ltd., supra, while considering as to what precaution a seller is required to exercise while entering into a transaction of sale with a buyer, observed as under:- "....He (the seller) must satisfy himself that the purchaser is a registered dealer, and the goods purchased are specified in his certificates but his duty extends no furthe....
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....en found by the Commissioner "suggesting any concealment of sale or purchase or furnishing inaccurate particulars in the returns." The Commissioner could, in terms of the proviso to Rule 5(4), instead of withholding the C-Form, issue to the applicant such forms in such numbers and subject to such conditions and restrictions, as he may consider necessary. However, there is no specific provision even under the aforementioned Rules which enables the Commissioner to cancel the C-Form that has already been issued. There is merit in the contention that one of the primary requirements for issuance of a C-Form is that the dealer to whom the C-Form is issued has to have a valid CST registration on the date that the C Form is issued. If the purchasing dealer does not possess a valid CST registration on the date of the transaction of sale, then the selling dealer cannot insist on being issued a CForm. In the present case, on the date of the transaction i.e. 10th March, 2015 the purchasing dealer viz., Respondent No. 2 did posses a valid CST registration. The name of the purchasing dealer as shown in the invoices, and the name and address of the registered purchasing dealer as reflected in....
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....alternative foras provided in the Act. We therefore overrule the objection of alternative remedy. In Sales Tax Officer, Ponkunnam and Another Vs. K.I. Abraham, supra, the respondent-assessee was a dealer in coconut-oil business having inter-State sales, who was assessed to sales tax for the year 1959-60 under Section 8 of the Central Sales Tax Act. Out of total turnover determined by the Sales Tax Officer, only a part thereof was supported by proper declaration Form 'C', with regard to which tax was imposed at concessional rate, and remaining part was not so supported with regard to which tax was imposed at higher rate on the premise that he did not file the declaration form on or before the prescribed date, i.e., 16.02.1961, but actually filed the declaration forms on 08.03.1961 but before the order of assessment was made. The assessee sought to explain the delay by submitting that he had received the declaration form late from the purchaser in Madras. Both the appeal and the revision filed by the assessee before the respective authorities were dismissed. The Kerala High Court, however, allowed his writ petition and quashed the orders of assessment of sales tax and directed the S....
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....before the Supreme Court were engaged in the manufacturing and sale of petroleum coke. The appellants were registered dealer under the Central Act and were liable to pay Central sales tax on the petroleum coke, which was the subject of inter-State sales. The appellants were required by the respondent State, in exercise of its powers conferred under Section 35-A of the Assam Sales Tax Act, 1947, to pay interest at the rate of 24% per annum on the delayed payment of the tax for the assessment years 1974 to 1980. The appellants in the writ petition challenged imposition of such interest on the premise that there being no mention of interest in the first part of Section 9(2) of the CST Act, the appellants were not liable to pay interest. Considering the question of competence of the State in demanding the interest while interpreting Section 9(2) of the CST Act, and relying on its earlier Constitution Bench judgment in Khemka & Company Vs. State of Maharashtra - 1975 (3) SCR 753, the Supreme Court in para 14 of the report held as under:- "Now, the words "charging or payment or interest" in Section 9(2) occur in what may be called the letter part thereof. Section 9(2) authorises the ....
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....orm/C-Form. Rule 17(20) of the Rajasthan Rules reads thus:- "(20) Where any dealer has generated declaration Form(s) or Certificate(s) by misrepresentation of facts or by fraud or in contravention to the provisions of the Central Sales Tax Act, 1956 and rules made there under, the assessing authority or any officer authorised by the Commissioner, after affording such dealer an opportunity of being heard cancel such declaration Form(s) or Certificate(s), and the list of declaration Form(s) or Certificate(s) so cancelled shall be published on the official web-site of the Department. The declaration Form(s) or Certificate(s) so cancelled shall be deemed to have not been generated through the official web-site of the Department." Section 7(4)(a) of the CST Act provides that a certificate of registration granted under this Section either on the application of a dealer to whom it has been granted or, where no such application has been made, after due notice to the dealer, be amended by the authority granting it. Section 7(4)(b) and Section 7(5) of the CST Act are the only provisions in the Act which provide for cancellation of the registration once granted. Section 7(4)(b) stipulates....
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....n either the date of the order cancelling the registration certificate or a date subsequent to the date of the order and not a date prior to the date of the order. In General Officer Commanding-in-Chief, supra, the Supreme Court held that any rule must conform to the provisions of the statute under which it is framed. It must also come within the scope and purview of the Rule making power of the authority framing the Rules. If either of the two conditions is not fulfilled, the Rules so framed would be void. Applying these two tests, the Supreme Court held that Rule 5-C framed by the Central Government was in excess of its Rule making power as contained in Clause (c) of sub-section (2) of Section 280 of the Cantonment Act before its amendment by the substitution of Clause (c). It is therefore void. The Supreme Court in State of Tamil Nadu Vs. P. Krishnamoorthy - (2006) 4 SCC 515, delineated the law on the scope of judicial review while examining the validity of a subordinate legislation in the following terms:- "15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. ....
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....ithin such further time as the authority may, for sufficient reason, extend. Rule 12 of the Central Rules provides a form of declaration, the particulars to be contained therein, the period within which it has to be furnished, consequence of loss of the declaration form, and the course to be adopted in that event. However, this provision does not provide for cancellation of Form C issued. No doubt, Section 13(3) of the CST Act empowers the State to make the Rules but with the rider that such Rules should not be inconsistent with the provisions of the CST Act and the Rules made by the Central Government under Section 13(1), to make the Rules to carry out the purpose of the Act. Section 13(4) of the CST Act inter-alia provides that in particular and without prejudice to the powers conferred by sub-section (3), the State Government may make rules for all or any of the purposes listed therein from Clauses (a) to (g). Clause (e) provides that the State Government may make rules prescribing "the authority from whom, the conditions subject to which and fees, subject to payment of which, any form of certificate prescribed under clause (a) of the first proviso to sub-section (2) of section....