Madras High Court
M/S.Chemplast Sanmar Ltd (Lsi) vs The Appellate Assistant Commissioner ... on 16 August, 2017
Bench: S.Manikumar, V.Bhavani Subbaroyan
In the High Court of Judicature at Madras Dated: 16.08.2017 CORAM: THE HONOURABLE MR. JUSTICE S.MANIKUMAR AND THE HONOURABLE MRS. JUSTICE V.BHAVANI SUBBAROYAN Tax Case (Revision) No.29 of 2017 M/s.Chemplast Sanmar Ltd (LSI), Karaikal. ... Petitioner/Appellant Vs The Appellate Assistant Commissioner (CT), Union Territory of Puducherry, Puducherry. ... Respondent/Respondent Prayer: Tax Case Revision filed under Section 38 of the Tamil Nadu General Sales Tax Act, 1959, to revise the order of the Sales Tax Appellate Tribunal, Puducherry, dated 24.03.2015, passed in T.A.No.04 of 2014. For Appellant : Mr.V.S.Manoj, for Mr.K.Vaitheeswaran For Respondent : Mr.J.Kumaran, Government Advocate (Pondy) O R D E R
(Order of the Court was made by S.MANIKUMAR, J.) Tax Case Revision is filed against the order, dated 24.03.2015, passed in T.A.No.04 of 2014, by which, the Sales Tax Appellate Tribunal, Puducherry, dismissed the appeal, filed by the assessee, on the grounds, inter alia,
(i) that the assessee, manufacturer of Caustic Soda Lye, Chlorine, Hydrogen, Hydrochloric Acid and Sodium Hypo Chlorite, did not request time, at the time of assessment, for production of declaration forms for inter-state sale, under Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, which permits the assessee to submit the declaration forms, within three months, after the end of tax period, to which the return relates;
(ii) that the assessee themselves agreed to pay 10% of differential tax for non-production of Form-C;
(iii) that no sufficient cause was shown for non-production of Form-C declaration; and
(iv) and for other reasons.
2. Short facts leading to the Tax Case Revision are that the appellant-assessee is a registered dealer, engaged in the manufacture of Caustic Sode Lye, Caustic Soda Flakes, Chlorine, Hydrogen, Hydro Chloric Acid and Sodium Hypochloride and registered under the repealed Pondicherry General Sales Tax Act, 1967, Central Sales Tax Act, 1956 and in Puducherry Value Added Tax Act, 2007 and also an assessee in the books of the Commercial Tax Officer, Karaikal.
3. While completing the assessment of the petitioner/appellant, for the year 2006-2007, on 13.5.2014, the Assessing Officer found that the petitioner/appellant reported in Form-I return, a total and taxable turn over of Rs.122,86,45,889/- and Rs.3,16,59,835/- respectively, claiming exemption, on a turnover of Rs.119,69,86,054/- towards tax holiday period, for the said assessment year 2006-2007, under the Central Sales Tax Act, 1956. The petitioner/appellant received the Assessment Order, dated 13.5.2014, confirming the tax liability to an extent of Rs.1,31,40,000/- @ 10%.
4. Being aggrieved by the same, the assessee preferred an appeal, before the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, contending inter alia,
(i) that the Commercial Tax Officer, Karaikal, has erred in imposing a higher rate of tax, at the rate of 10%, as against the concessional rate of 4% for the turnover, due to non-production of Form-C declaration;
(ii) that the Commercial Tax Officer, Karaikal, ought to have granted further time, for production of C Form declaration and the non-submission of the said form, is only due non-availability of the time.
(iii) that the Commercial Tax Officer, ought to have granted further time for production of declaration form, since the appellant could not produce the same, due to factors beyond its control.
(iv) that the Commercial Tax Officer, Karaikal, ought to have appreciated that the decisions of this Court in State of Tamil Nadu v. Arul Murugan reported in 51 STC 381, confirmed by the Hon'ble Apex Court in 94 STC 410, clearly contemplate the extension of time for production of statutory declaration forms.
(v) The appellant received Form-C declaration to the extent of turnover of Rs.1,06,92,000/-, out of total turnover of Rs.1,31,40,000/-. The tax liability for the remaining turnover is only Rs.1,46,880/-."
5. Material on record shows that before the Appellate Assistant Commissioner, Puducherry, the Assessing Officer has contended that the appellant did not request time for production of Form-C declaration and that the Company has admitted to pay the differential tax for non-production of declaration forms; that as per the mandatory requirement of sub-Rule (7) in Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 and proviso therein, the declaration forms of the interstate sales ought to have been submitted for all the quarters, within three months, after the end of the period, to which, declaration relates; that the appellant has not complied with the mandatory provisions and failed to submit the same, even at the time of the finalization of assessment for the year 2006-07; and that after such a long period of time, in 2014, declarations were submitted.
6. After considering the rival submissions and taking note of the provisions, under the Central Sales Tax (Pondicherry) Rules, 1967; Central Sales Tax Act, 1956; and Central Sales Tax (Registration and Turnover) Rules, 1957, vide order, dated 16.09.2014, in Appeal No.7/CST/2014-15/AAC, the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, at Paragraphs 11 to 15, dismissed the appeal, as follows:
"As provided under Rule 12(7) of CST (Registration and Turnover) Rules, 1957, the form "C" shall be furnished to the prescribed authority within three months after the end of the period to which the declaration or the Certificate relates. It is also provided thereunder that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration within the aforesaid time, that authority may allow such declaration to be furnished within such further time as that authority may permit. The Hon'ble Madras High Court in the case of 'Arulmurugan and Company' (1982) 51 STC 381 (Mad.), has held as follows:
"Besides, such power as the appellate authority is empowered to exercise in relation to an assessment under appeal, has got to be exercised only in the same manner and subject to the same conditions, if any, which govern the exercise of the power of assessment by the assessing authority in the first instance. It follows, therefore, that whatever discretion is conferred on the assessing authority for purposes of assessment must so be regarded, as a matter of statutory construction, to have been conferred on the appellate authority even without the concerned statutory provision expressly naming the appellate authority in that behalf." (Pp.No.383 of 51 STC 381)
12. Knowing well that now it is settled law that the declaration forms can be produced at the appeal stage but a blanket refusal to accept the declaration form-C produced after completion of assessment has been made not for reason that all the pending forms were not produced, but because no reason was furnished which prevented them to produce the same before the assessing authority at the time of assessment.
13. To justify this decision, it will be appropriate to quote the guidance issued in the judgment rendered by the Hon'ble Supreme Court in the case of State of Andhra Pradesh vs. Hyderabad Asbestos Cement Production Ltd., [(1994) 94 STC 410] Pp.421 Para E-H as follows:
"13. The aforesaid observations show that the mere use of the words "the first assessing authority" in sub-rule (7) of Rule 12 cannot and does not mean, in the context and scheme of the enactments concerned herein, that the appellate authorities do not have the power to receive Form-C in appeal. This power can of course be exercised only where sufficient cause is shown by the dealer for not filing them up to the time of assessment before the first assessing authority. If in a given case, a dealer had obtained further time from the first assessing authority and yet failed to produce them before him, it is obvious that the appellate authority would adopt a stiffer standard in judging the sufficient cause shown by the dealer for not producing them earlier. It is necessary to reiterate that receipt of those forms in appeal cannot be a matter of course; it should be allowed only where sufficient cause is established by the dealer for not producing them before the first assessing authority as contemplated by Rule 12(7)."
14. As discussed above, it is clear that the dealer neither submitted the declaration form-C within three months after the end of the period to which the declaration relates nor before the completion of the assessment and as per the provisions of the CST (Registration and Turnover) Rules, 1957."
7. Being aggrieved by the said order, the appellant has filed Tax Appeal No.04 of 2014, before the Sales Tax Appellate Tribunal, Puducherry, contending inter alia that the Company had approached their purchaser, on various occasions for C-Form declarations, but their supplier failed to produce the same to them. Therefore, the Company sent a legal notice to them, for C-Form declarations, against the taxable turnover to the extent of Rs.1,31,40,000/- (Differential tax: Rs.7,88,400/-). In the meanwhile, the assessment was completed, vide Assessment Order, dated 13.05.2014 in Assessment No.1982/2006-07 and the tax due, was arrived to an extent of Rs.20,83,191/- and out of which, the appellant had already paid Rs.12,94,791/- and the balance of Rs.7,88,4001- pertains to tax on non-production of C-Forms.
8. Before the Tribunal, the appellant has submitted that after receiving the assessment order, dated 13.05.2014, on 14.05.2016, the company had received two C-Forms, viz., (i) C-Form, bearing No.0239154, dated 30.05.2014 for a taxable turnover of Rs.74,70,000/-, for the period from 07.10.2006 to 30.12.2006 and (ii) C-Form, bearing No.0239155, dated 30.05.2014, for a taxable turnover of of Rs.32,22,000/-, for the period from 31.08.2006 to 26.09.2006, from their customer, Tvl.Ejaz.Traders, Neyveli and that the company has submitted the same to the assessing authority on 06.06.2014 and sought for a revised assessment order. Though the taxable turnover, after submitting the C-forms, was reduced from Rs.1,31,40,000/- to Rs.24,44,800/-, the appellant had opted to contest the entire turnover of Rs.1,31,40,000/-.
9. During the personal hearing given to the appellant on 16.09.2014, the authorised representative of the appellant had submitted the details of C- Forms submitted on 06.06.2014 and requested for appropriate relief. According to the petitioner, the appellate authority has passed an order, dated 16.09.2014, without considering the sufficient cause, shown by the appellant and erred in concluding that the ratio decidenti in both the High Court and Supreme Court decisions, are not applicable to the case of the petitioner and dismissed the appeal, on the ground that C-Forms were not produced within three months, after the end of the assessment year, in terms of the CST (Regulation and Turnover) Rules, 1957.
10. Before the Appellate Tribunal, a further contention has been made that the Appellate Assistant Commissioner, Puducherry, has failed to appreciate that Section 8(4) of the Central Sales Tax Act, 1956, which permits the assessee to file declaration forms within prescribed time or within such further time for sufficient cause that the authority may permit and that the appellant has clearly established sufficient cause, and that the reasons for non-submitting the Form-C Declarations were beyond their control, despite the fact that the company had taken reasonable steps, to procure the declaration forms, from their purchasers.
11. Before the Tribunal, the department has made submissions that the assessment relates to 2006-2007 and since it should not be prolonged further, a best judgment notice, dated 6.5.2014 was served on the dealer on 8.5.2014, to produce the records and accordingly, assessment for the year 2006-2007 was completed on 13.05.2014, based on the records submitted by the dealer. The department has further submitted that the appellant had reported total CST turnover for a value of Rs.122,86,45,889/-, claiming exemption, on a turnover of Rs.119,69,86,054/- and as per the accounts submitted by the appellant and after scrutiny of the same, the department has made the appellant liable for value of Rs.1,31,40,000/- for the inter-state sale made by them, for which, Form-C Declarations were not submitted within time.
12. Before the Tribunal, the department has further submitted that as per Rule 12(7) of the CST (Registration and Turnover) Rules, 1957, the time prescribed for submitting Form-C for claiming exemption/concession, is three months, after the end of the tax period, to which the return relates, but even after lapse of seven years, the appellant has not submitted the balance C-Forms and hence, in the absence of Form-C and Form-I, higher rate of tax @ 10% has been levied and further contention has been made that though the appellant was given sufficient time, for production of C-Form declarations, they failed to produce the same, for availing the concessional rates of tax. After considering the rival submissions, at Paragraphs 9 and 10, the Sales Tax Appellate Tribunal, Puducherry, in Tax Appeal No.4 of 2014, dated 24.03.2015, ordered as hereunder:
"9. It was brought to the notice of this Court that the appellant took strenuous steps in getting the Form-C Declaration from its purchaser by sending letters and legal notice, but its all only after passing the order, dated 13.05.2014, by the assessing officer. Even the appellants seems to have given a representation on 28.07.2014, before the Appellate Assistant Commissioner-CT praying one month time to produce the balance C-Form Declaration to conclude the appeal by citing the decision of the Hon'ble Madras High Court (Full Bench) reported in (51) STC 381 [State of Tamil Nadu v. Arul Murugan]. On a perusal of the said decision, it is found that where the assessee seeks to file C Forms beyond the stage of assessment, the relative power which the concerned authority should invoke the power defined under the provision of Section 8(4) and not the power defined in the proviso to rule 12(7). The 1st appellate authority having considered that the appellant failed to submit the C-Forms before 25.07.2007, being the last date to submit the last month return of the year 2006-07 or in pursuance of sub-rule (7) of Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, the appellant has defaulted in submitting all the C-Forms within June, 2007, has turned down to the appellant's contention and accordingly dismissed the appeal preferred before him by the appellant. In the instant case, the appellant failed to obtain further time for production of Form-C Declaration before the assessing authority whereas only before the 1st appellate authority sought for one month time, stating the practical difficulties being faced by them. If at all the appellant wanted further time it ought to have sought the same before the assessing authority, whereas, keeping quite and also accepted to pay the differential tax before the assessing authority, the appellant only raised such contention before the 1st appellate authority and and therefore, the 1st appellate authority has rightly held that the appellant has not shown sufficient cause for not filing them upto the time of assessment before the assessing authority. Therefore it cannot be said that 1st appellate authority has not taken note of the sufficient cause established by the appellant. Even the reason putforth by the appellant that the assessment officer of appellant's purchaser was vacant for long time and so purchaser could not get C-Forms from the officer incharge which was also apprised during the 1st hearing are all invented only for the purpose of this appeal before this court as the said reasons have not been asserted in the memorandum of appeal preferred by the appellant before the 1st appellate authority. The further contention of the appellant that though the order received on 14.5.2014, but the appellant received the C-Forms for a taxable turn over of Rs.74,70,000/- on 30.5.2014 for the assessment period from 7.10.2006 to 30.12.2006 and the C-Forms for a taxable turn over of Rs.32,22,000/- on 30.5.2014 for the assessment period from 31.8.2006 to 26.9.2006 and in this regard the appellant submitted to the Commercial Tax Officer and sought to issue revised order and since the appellant not received the revised order, the appellant preferred appeal on 13.6.2014 are all the reasons to substantiate the claim of the appellant. Had the appellant taken timely steps for getting C-Forms before the assessment date, the assessment officer would have considered the request of the appellant, whereas only after passing the assessment order, the appellant took effective steps and obtained C-Forms which both assessment officer as well as the 1st appellate authority felt as highly belated and accordingly turned down to the request of the appellant and therefore, there is no strange in upholding the order of the assessment officer by the respondent authority. Therefore this court feels that the order passed by the respondent authority in Appeal No.7/CST/2014-15, dated 16.9.2014 does not call for any interference by this court.
10. In the result, the appeal is dismissed. The impugned Order, dated 16.9.2014 passed by the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Pondicherry in Appeal No.7/CST/2014-15 is hereby confirmed. Considering the facts and circumstances there shall be no order as to costs."
13. Being aggrieved by the same, the instant Tax Case Revision has been filed, on the following questions of law, "1. Whether; on the facts and circumstances of the case and in law, the Sales Tax Appellate Tribunal was justified in invoking proviso to Rule 12(7) of the CST (Registration and Turnover) instead of invoking the power proviso to section 8(4)?
2. Whether, on the facts and circumstances of the case and in law, the Sales Tax Appellate Tribunal was justified in ignoring the position of law that the declaration forms can be accepted at the appellate stage per section 8(4)?
3. Whether, on the facts and circumstances of the case, the Sales Tax Appellate Tribunal was right in not considering the sufficient cause for non-production of declaration forms?
4. Whether on the facts and circumstances of the case and in law, the Sales Tax Appellate Tribunal was justified in confirming the demand of 10% tax against the concessional rate of tax for non-production of C Form Declaration forms without appreciating the ratio of the Madras High Court decision in the case of State of Tamil Nadu v. Arul Murugan (51 STC 381), which is confirmed by the Supreme Court in 94 STC 410?"
14. Placing reliance on the decision Bench of this Court in M/s.K.S.B.Pumps Ltd., v. State of Tamil Nadu [TCR.No.87 of 2015, dated 30.09.2015] and Vista Security Technics Pvt. Ltd., v. The State of Puducherry [TCR.Nos.51 to 57 of 2015, dated 08.07.2015], Mr.V.S.Manoj, learned counsel for the appellant-assessee submitted that Courts have consistently held that when C-Form Declaration is submitted, even before the Appellate Tribunal, the same has to be accepted and accordingly, assessment has to be made. He further submitted that all the authorities have failed to consider that sufficient cause was shown for non-compliance.
15. Mr.J.Kumaran, learned Government Advocate (Pondy), submitted that Form-C Declaration has been furnished, after passing of the assessment order and that there was a delay, not reasonably explained. He prayed to sustain the order of the Appellate Tribunal.
Heard the learned counsel for the parties and perused the materials available on record.
16. Before adverting to the rival contentions, this Court deems it fit to have a cursory look at some of the provisions of the Central Sales Tax (Pondicherry) Rules, 1967; Central Sales Tax Act, 1956; and Central Sales Tax (Registration and Turnover) Rules, 1957, Central Sales Tax (Pondicherry) Rules, 1967:
"5(1). Every dealer other than those specified in the proviso to Rule 11 of the Central Sales Tax (Registration and Turnover) Rules, 1957, registered under section 7 of the Act, shall submit a return of his transactions in the course of interstate trade or commerce or in the course of export of the goods out of the Territory of India in Form 1 together with the connected declaration form or duplicate of such form where the original has been lost and the certificates in Forms D, E-I and E-II so as to reach the assessing authority on or before the 25th of each month showing the turnover for the preceding month and the amount or amounts collected by way of tax together with a challan or a crossed cheque in favour of the assessing authority for the payment of tax due thereon under the Act.
Central Sales Tax Act, 1956:
8(4). The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless 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:
Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit."
Central Sales Tax (Registration and Turnover) Rules, 1957:-
12(7). The declaration in Form C or Form F or the certificate in Form E-I or Form E-II shall be furnished to the prescribed authority with in three months after the end of the period to which the declaration or the certificate relates:
Provided that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate with in the aforesaid time, that authority may allow such declaration or certificate to be furnished within such further time as that authority may permit."
17. Assessment year relates to 2006-07. As per the provisions of the Central Sales Tax (Pondicherry) Rules, 1967, C-Form Declarations ought to have been submitted before 25th April, 2007, being the last date to submit the last month return of the year 2006-07 or in pursuance of sub-rule (7) of Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, C-Form Declarations ought to have been submitted within June' 2007. However, in the case on hand, the assessment order has been passed on 13.05.2014, by the assessing authority. An appeal has been filed before the Appellate Assistant Commissioner. The Appellate Authority has proceeded, by stating that as per sub-rule (7) of Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, C-Form Declarations ought to have been submitted within June' 2007. As per the proviso to Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957, if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate with in the aforesaid time, that authority may allow such declaration or certificate to be furnished within such further time as that authority may permit.
18. At this juncture, it has to be seen, as to whether, the appellant had acted diligently to obtain the Form-C Declarations, from their purchasers, for production before the authorities. Contents of the legal notice issued by the assessee to the purchaser, are as follows:
"My client states that in the course of manufacture of their final products waste and scrap is generated. During the period August 2006 to March 2007, scrap was sold to you for a total consideration of Rs.1,36,65,600/-, the details of which are set out in the tabulated sheet annexed to this notice. You had requested them to make supplies at the concessional rate of sales tax based on the assurance that you would provide the Form C for the supplies. Pursuant to your promise to provide Form C, my client paid Sales Tax at the rate of 4% and supplied the goods. Despite many reminders, you did not provide the Form C to them.
3. My client states that since they had not received the C Forms, officers of my client visited your office on 15th and 18th April 2013 and requested that the C Forms be issued. During the meeting, you asked my client to obtain clearance from the Commercial Taxes Officer, Virudhachalam and the Assistant Commissioner of Sales Tax, Virudhachalam, for issuing the C Forms. Even though, this was not the responsibility of my client, they met the above mentioned officers of the sales tax Department and sought their clearance to enable you to issue the C Forms, which was communicated to you by telephone on 13th May 2013. Thereafter, my client also issued a letter, dated 14.05.2013, requesting that the C Forms for the above mentioned supplies be issued to them."
19. In State of Tamil Nadu v. Arul Murugan reported in 51 STC 381, a Full Bench of this Court, while dealing with the power of the Appellate Authority, to receive C-Form Declarations, held as follows:
"We hold that the Tribunal has the power to receive C forms at the time of the appeal, for sufficient cause. The Tribunal can then proceed to the next step of applying the concessional rate of tax to the turnover covered by the C forms. Or, the Tribunal may remand the case to the Appellate Assistant Commissioner. The remand may be for the specific purpose of going into the question of sufficient cause. The remand may also be loaded with a finding by the Tribunal that there has been sufficient cause, leaving the scrutiny of the C forms alone to be undertaken on remand. The Tribunal may, if satisfied about the sufficient cause set aside even the assessment order, and direct the assessing authority to re-do the assessment, in which event there would be no occasion for the assessing authority to go into any question of "delay" in filing the C forms, for with the setting aside of the assessment the whole thing is once again at large."
The abovesaid decision has been confirmed by the Hon'ble Supreme Court in State of Andhra Pradesh vs. Hyderabad Asbestos Cement Production Ltd., [(1994) 94 STC 410].
20. In the case of State of H.P., and others v. Gujarat Ambuja Cement Ltd., and another reported in 142 STC 1 (SC), the Hon'ble Supreme Court while dealing with belated filing of statutory forms, held as follows:
"It was urged on behalf of the appellant-State that declaration forms under the Central Act were not filed within the time and/or were defective. That does not in reality amount to non-compliance of a statutory provision. The respondent No.1-company was claiming exemption and, therefore, had not filed the declaration forms. Some of the forms which were filed were treated to be defective. Undisputedly, before the revisional authority a prayer was made for grant of opportunity to rectify the defects, if any. That was turned down. It is to be noted that under Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 (in short the `Registration Rules') the declaration form can be filed at a subsequent point of time and not necessarily along with returns. On an application being made before the Assessing Officer the exemption can be granted. The object of the Rule is to ensure that the assessee is not denied a benefit which is available to it under law on a technical plea. The Assessing Officer is empowered to grant time. That means that the provisions requiring filing of declaration forms along with the return is a directory provision and not a mandatory provision. In a given case even the declaration forms can be filed before the appellate authority as an appeal is continuation of the assessment proceedings. In a given case, if the appellate authority is satisfied that assessee was prevented by reasonable and sufficient cause which dis-enabled him to file the forms in time, it can be accepted. It can also be accepted as additional evidence in support of the claim for deduction. In the instant case, respondent No.1-company made a specific request before the revisional authority which was turned down. Therefore, the question of any non-compliance with the relevant statutes does not arise. It was noted by this Court in Sahney Steel and and Press Works Ltd., v. Commercial Tax Officer [1985] 4 SCC 173 that even in a given case, an assessee can be given an opportunity to collect Declaration Forms and furnish them to the assessing authority if the challenge of the assessee to taxability of a particular transaction is turned down."
21. In Vista Security Technics Pvt. Ltd., v. State of Puducherry [Tax Case (Revision) Nos.51 to 57 of 2015], the assessee requested time to produce the statutory declaration forms, viz., Forms-C, F and I. Assessee could not produce the same, before completing the final assessment. Assessment orders were passed, demanding a higher rate of tax, on the ground that the assessee had not produced the necessary statutory declaration forms. Being aggrieved by the same, the assessee preferred appeals before the Appellate Assistant Commissioner. Though statutory declaration forms were produced, the same were not accepted, on the ground that the assessee had not shown any sufficient cause to file the statutory declaration forms belatedly. Therefore, the first Appellate Authority dismissed the appeals. As against the said order, the assessee pursued the matter before the Tribunal, which also resulted in dismissal. Accepting the contention that the first Appellate Authority has powers to receive such documents and following the decisions in State of Tamil Nadu v. Arul Murugan reported in 51 STC 381 and State of H.P., and others v. Gujarat Ambuja Cement Ltd., and another reported in 142 STC 1 (SC), a Hon'ble Division Bench of this Court, at Paragraphs 12 and 13, held as follows:
12. The ratio in the above-said decision will enure to the benefit of the assessee. It is to be noted that the approach of the Department should be to ensure that what the assessee is rightfully entitled to should be extended to the assessee without harping on technicalities. Accordingly, we are inclined to set aside the orders of the Tribunal and remand the matters back to the Assessing Authority for passing fresh orders.
13. In the result, the impugned orders of the Tribunal stand set aside and the above Tax Case (Revisions) stand allowed. The Assessing Officer is directed to proceed with the assessment after receiving the necessary statutory declarations and complete the assessment on merits. No costs. The petitioners are directed to submit the necessary statutory declaration forms before the Assessing Officer along with a copy of this order.
22. In M/s.K.S.B.Pumps Ltd., v. State of Tamil Nadu [Tax Case (Revision) No.87 of 2015, dated 30.09.2015], C-Form declaration to an extent of Rs.19,98,976/-, was not submitted, for the assessment year 2000-01, within five years from the date of the original assessment order, before the Assessing Officer, as per the circular of the Commissioner. Higher rate of tax was imposed. Being aggrieved by the same, an appeal was filed. Pending appeal, the assessee submitted Form C declaration for a turnover of Rs.40.28 Lakhs, before the Assessing Officer, who accepted the same, and passed a revised order, dated 29.9.2005. Taking note of the same, the first Appellate Authority passed an order, partly allowing the claim and remanding the matter to the Original Authority. The assessee filed a second appeal before the Tamil Nadu Sales Tax Appellate Tribunal and by the time, the entire disputed tax had been paid by the assessee. During the pendency of the second appeal, the assessee obtained Form-C declarations for the balance turnover and offered to produce the same. But the learned counsel for the assessee failed to appear before the Tribunal, resulting in dismissal of the appeal. Application filed for restoration was also dismissed. However, the matter was remitted back to the Tribunal. Again, the Tribunal dismissed the appeal, on the ground that C Form declaration were not produced, within five years from the date of the original assessment order, before the Assessing Officer, as per the circular of the Commissioner.
23. Being aggrieved by the same, the assessee therein filed Tax Case Revision No.87 of 2015. One of the questions of law, framed by this Court was, whether in the facts and circumstances of the case, the Tribunal is right in not accepting the C declaration forms filed by the appellant, at the time of hearing, by relying on a circular issued by the Commissioner and on the ground that the same were not filed before the Assessing Officer within a period of five years, when a Full Bench of this Court in the judgment reported in 51 STC 381 held that an appeal is a continuation of assessment proceedings and that the Tribunal has the power to accept the declaration forms?
24. Following the Full Bench of this Court in State of Tamil Nadu v. Arul Murugan reported in 51 STC 381, a Hon'ble Division Bench of this Court in M/s.K.S.B.Pumps Ltd's case (cited supra), at Paragraph 9, held as follows:
9. Insofar as second question is concerned, the issue is covered by a decision of the Full Bench of this Court in State of Tamil Nadu v. Arul Murugan [(1982) 51 STC 381] to the effect that an appeal is a continuation of the assessment proceedings. Therefore, the fact that the petitioner could have filed an application for rectification along with necessary forms would not preclude the assessee from producing them either before the first Appellate Authority or before the second Appellate Authority, provided the forms of declaration are genuine. Therefore, the Tribunal was not right in non suiting the petitioner on the short ground that they ought to have produced the forms before the Assessing Officer within five years, as per the circular of the Commissioner. Hence, the second question is answered in favour of the petitioner/assessee.
25. Though in the case in hand, the department has contended that sufficient cause was not shown for the production of C-Form declaration, before the assessing officer and that no request was made for production of the same, in the light of the decisions in State of Tamil Nadu v. Arul Murugan reported in 51 STC 381, followed in Vista Security Technics Pvt. Ltd., v. State of Puducherry [Tax Case (Revision) Nos.51 to 57 of 2015], and M/s.K.S.B.Pumps Ltd., v. State of Tamil Nadu [Tax Case (Revision) No.87 of 2015, dated 30.09.2015], accepting the contention of the assessee therein that the Appellate Authority/Tribunal, has powers to receive documents, in particular, Form-C declarations and considering the fact that the assessee had taken diligent steps to obtain Form-C Declarations, from their purchasers, by causing a legal notice and on obtaining the same, produced the C-Form Declarations, we accept the sufficient cause shown, which the authorities have failed to consider. The impugned order, dated 24.03.2015, passed in T.A.No.04 of 2014, is liable to be set aside. Accordingly, the same is set aside. Substantial questions of law are answered in favour of the assessee.
26. Hence, the Tax Case Revision Petition is allowed. No costs.
(S.M.K., J.) (V.B.S., J.) 12.07.2017 Index: Yes Internet: Yes S.MANIKUMAR, J.
AND V.BHAVANI SUBBAROYAN, J.
skm To The Tamilnadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore.
Tax Case (Revision) No.29 of 2017 12.07.2017