M/S Hanuman Paper Works Vs Commissioner of Commercial Tax

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2025:CGHC:18517-DB

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AFR

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Digitally signed by AJAY KUMAR DWIVEDI Date: 2025.05.02 13:15:44 +0530

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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TAXC No. 124 of 2023

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{Arising out of order dated 11.04.2023 passed by the Chhattisgarh Commercial Tax Tribunal, Raipur in Ref. Case No. Ref/93/25/2022/VAT}

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M/s Hanuman Paper Works Office At Farishta Complex , G.E. Road, Raipur, District Raipur (C.G.) Through Its Authorized Representative / Manager Namely Shri Vinay Agrawal, S/o Sagar Agrawal, Aged Around 49 Years, R/o 102, Durga Mandir, 1, Lasvista Colony, Amlidih, Raipur, Chhattisgarh. --- Applicant.

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versus

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Commissioner Of Commercial Tax Behind Raj Bhavan, Civil Lines, Raipur, Chhattisgarh. --- Respondent.

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WITH

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TAXC No. 123 of 2023

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{Arising out of order dated 11.04.2023 passed by the Chhattisgarh Commercial Tax Tribunal, Raipur in Ref. Case No. Ref/94/26/2022/CST} M/s Hanuman Paper Works Office At Farishta Complex, G.E. Road, Raipur, District Raipur (C.G.) Through Its Authorized Representative/manager Namely Shri Vinay Agrawal, S/o Sagar Agrawal, Aged About 49 Years, R/o 102, Durga Mandir, 1, Lasvista Colony, Amlidih, Raipur (C.G.) --- Applicant.

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Versus

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Commissioner Of Commercial Tax Behind Raj Bhawan, Civil Lines, Raipur (C.G.) --- Respondent .

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: For Applicants Mr. Hari Agrawal, Advocate. For Respondents : Mr. Rahul Tamaskar, GA.

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Hon'ble Shri Sanjay K. Agrawal & Hon'ble Shri Deepak Kumar Tiwari, JJ

Order on Board

(24/04/2025)

Sanjay K. Agrawal, J

1. Since both the cases involve common question of law and fact, they are clubbed together, heard together and are being decided together by this common order.

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2. These are the Reference Applications preferred by the applicants under Section 55 (2) of the Chhattisgarh Value Added Tax Act, 2005 (for short the ‘ Act 2005 ’) requiring the Tribunal to refer the question of law.

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3. The Applicants - M/s. Hanuman Paper Works (hereinafter referred to as " the applicant Firm ") is a proprietorship firm and is engaged in business of sale and purchase of papers and is registered in State of Chhattisgarh with TIN No.22101402062 for assessment of Value Added Tax, Entry and Central Sales Tax. The applicant Firm submitted the quarterly return for the financial year 2014-15 wherein for the purpose of inter-state sale, the applicant has shown a

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transaction of Rs.10,71,34,543/-, however, C-Form showing inter-state sale of only Rs.9,51,92,191/- was filed, as such, for the difference amount of sale of Rs.1,19,42,352/- no C-Form was submitted. On account of non submission of C-Form, the Assessing Officer by the order dated 25.10.2018 disallowed the deduction of inter-state sale and held the said sale of Rs.1,19,42,352/- to be local sale and thereby imposed VAT @ 5% i.e. Rs.5,97,118/-, Entry Tax @ 1 % and interest of Rs.3,76,184/-. Against the said order of assessment, the applicant Firm preferred an appeal before the Additional Commissioner, Commercial Tax Chhattisgarh, Raipur which was rejected on 01.12.2020. Challenging the order dated 01.12.2020, the applicant Firm has preferred an appeal before the Chhattisgarh Commercial Tax Tribunal, Raipur under Section 55 (1) of the Value Added Tax Act, 2005 which was also rejected by the impugned order dated 11.04.2023 holding that no case is made out for referring the question of law mentioned in the application. Being aggrieved by the said order, this application has been filed under Section 55 (2) of the VAT Act.

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4. Mr. Hari Agrawal, learned counsel for the applicant submits that earlier due to technical glitches in the online portal, the

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C-Form could not be issued online within prescribed time for which the applicant prayed for grant of some time to submit the C-Form, however, the Tribunal has rejected the said prayer by the order dated 02.09.2022. He further submits that on 30.09.2022, requisite C-Form was generated online on the supplier's portal showing the purchase of Rs.1,19,51,777/made from the supplier herein, however, the Tribunal refused to refer the question of law and rejected the application under Section 55 (1) of the VAT Act by the order impugned dated 11.04.2023 which ought to have been considered in light of Section 8 (4) of the the Central Sales Tax Act, 1956 (for short " the Act 1956 ") and Rule 12 (7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 (for short " the Registration Rules 1957 "). In support of his contention, he places reliance in the matters of State of A.P. and Ors Vs. M/s Hyderabad Asbestos Cement Production Ltd. and Ors 1 and State of H.P. and Ors. Vs. Gujarat Ambuja Cement Ltd. and another 2. In view of such submission, learned counsel for the applicant prays to allow the instant applications by directing the Tribunal to make a reference on the question of law to be formulated by this Court.

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1(1994) 5 SCC 100

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2(2005) 6 SCC 499

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5. Mr. Rahul Tamaskar, learned counsel for the respondent would submit that though sufficient time was granted to the applicant to submit C-Form, however, for the last 7 years he has not submitted the same, therefore, sale of Rs.1,19,42,352/- was held to be local sale and as such, the Tribunal was justified in rejecting the application filed under Section 55 (1) of the VAT Act.

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6. We have heard learned counsel for the parties and considered their rival submissions and also went through the record with utmost circumspection.

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7. Undisputedly, the applicant could not submit C-Form for interstate sale of Rs.1,19,42,352/- within prescribed time and accordingly the Assessing Authority has disallowed the deduction of inter-state sale and held the said amount as local sale and thereby imposed the VAT @ 5 %, Entry Tax @ 1 % and interest of Rs.3,76,184/- on the aforesaid amount. The appeal filed by the applicant Firm was dismissed by the Additional Commissioner, Commercial Tax, Raipur and the Tribunal has also rejected the application preferred by the applicant under Section 55 (1) of the VAT by the impugned order dated 11.04.2023 and consequently, no time was

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granted to the applicant to file the requisite proforma as

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contained in Section 8 (4) of the Act 1956, which reads thus:-

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8. Rates of tax on sales in the course of interState trade or commerce-

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(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:

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Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.

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8. A careful reading of provisio to sub section (4) of the Section 8 of the Act 1956 would show that power is conferred to the prescribed authority to extend the time for submission of C- Form by the dealer. Likewise, Rule 12 (7) of the Registration Rules 1957 deals with the declaration in Form C which shall be furnished to the prescribed authority within three months after the end of the period to which the declaration or the certificate relates. Rules 12 (7) is reproduced hereunder for ready reference:-

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"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 within three months after the end of the period to which the declaration or the certificate relates:

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PROVIDED that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate within the aforesaid time, that authority may allow such declaration or certificate to be furnished within such further time as that authority may permit. "

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9. A careful perusal of aforesaid rule would show that three months' time has been prescribed for submission of C-Form after the end of the period to which the declaration or the certificate relates, however, it is also provided by proviso to Rule 12 (7) of the Registration Rules 1957 that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate within the aforesaid time, the authority may allow such declaration or certificate to be furnished within the extended time.

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10. The issues whether when a dealer does not furnish C-Form before the Assessing Authority up to the time of assessment, can he be permitted to file the said form in appeal preferred by him before the first or second appellate authority; and

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whether the first or second appellate authorities have power to receive Form-C in appeal, have come up for consideration before the Supreme Court in M/s Hyderabad Asbestos Cement Product Ltd. (Supra) , wherein, their Lordships have framed the following question in Para 6:-

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"6. Having noticed the relevant provisions of law, we may now turn to the question arising in these matters. It is this: Where a dealer does not furnish Form-C before the first assessing authority up to the time of assessment, can he be permitted to file the said forms in the appeal preferred by him i.e. before the first or the second appellate authority? In other words, the question is whether the appellate authority, whether the first or the second appellate authority has the power to receive Form-C in appeal and to grant relief, in case the dealer satisfies the appellate authority that he had sufficient cause for not producing the said certificate before the first assessing authority? "

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11. Their Lordships have answered to the aforesaid questions in Para 13 with reference to sub rule (7) of Rule 12 of Registration Rules 1957 and held that power can be exercised by the appellate authorities only where sufficient cause is shown. Para 13 of the aforesaid judgment is reproduced hereunder:-

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" 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

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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). The requirement of the said sub-rule cannot be excluded from consideration by the appellate court, while judging the sufficiency of the cause shown. It must be remembered that that is the primary obligation of the dealer and his failure to abide by it must be properly explained. Insofar as the Sales Tax Appellate Tribunal under the Andhra Pradesh Act is concerned, it is governed by Regulation 11(1) referred to hereinabove which again is nothing but a reiteration of the very same power."

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12. In the matter of Gujarat Ambuja Cement Ltd and anr (Supra) ,

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it has been held that under Rule 12 (7) of the Registration Rules 1957, the declaration form can be filed at a subsequent point of time and not necessarily along with returns. The

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following observation was made at Para 37 by their

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Lordships :-

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"37. It was urged on behalf of the appellantState 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

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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 Press Works Ltd. and Anr. v. Commercial Tax Officer and Ors, [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. "

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13. In light of the aforesaid decisions of the Supreme Court and in view of provisions contained in Section 8 (4) of the Act 1956 and in Rule 12 (7) of the Registration Rules 1957, it is clear that the prescribed authorities as well as the appellate authorities have power and jurisdiction to extend the limit to submit and receive the C-Form on showing sufficient cause by the dealer or the applicant.

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14. In view of above, it is held that the Tribunal was not justified in rejecting the application under Section 55 (1) of the VAT Act filed by the applicant by the order dated 11.04.2023 without considering the fact that authorities have power and jurisdiction to extend time for production of C-Form on

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showing sufficient cause. Hence, in our considered opinion the following questions of law arises for making reference:-

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"1. Whether the assessing authority, appellate authority and revisional authority have power and jurisdiction to extend the time for submission of C-Form by the applicant-Firm on showing sufficient cause ?

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Whether the assessing authority, appellate authority and revision authority have power and jurisdiction to receive the C-Form by the applicant-Firm on showing sufficient cause for not filing it at the time of assessment ?"

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15. The concerned Tribunal shall make a reference to this Court on the aforesaid question of law, expeditiously.

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16. Accordingly, both the reference applications are disposed of.

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Sd/Sd/( Sanjay K. Agrawal ) ( Deepak Kumar Tiwari ) Judge Judge

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ajay

M/S Hanuman Paper Works v. Commissioner of Commercial Tax

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M/S Hanuman Paper Works v. Commissioner of Commercial Tax

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