Dismissed¶63

State of Chhattisgarh, v. M/s Prakriti Industries

Chhattisgarh HC11 Sept 2025WA/97/2021

Case brief

AI extract

What is this about?

C-Form defect; typographical error not a substantial defect; wrong Rules year (1975 vs 1957); imperfectly legible writing; audit objection; concessional rate of CST @ 2% under Section 8, Central Sales Tax Act, 1956; reassessment under Section 9(2) read with Section 28(1) of the VAT Act; full rate 10%; differential demand Rs.6,26,478/-; liberty to proceed against purchasing dealer; writ appeal by State dismissed, no cost; Chhattisgarh High Court, Bilaspur; decision date 12.09.2025; neutral citation 2025:CGHC:46778-DB; appeals clubbed, facts from lead case WA-79-2021.

What did the court decide?

Writ appeals dismissed with no cost; the learned Single Judge's order dt. 02.02.2018 setting aside the demand order dt. 12.08.2013 and the revisional order dt. 30.08.2014 stands upheld. ¶63

State of Chhattisgarh, Vs M/s Prakriti Industries — Chhattisgarh HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

Writ appeals dismissed with no cost; the learned Single Judge's order dt. 02.02.2018 setting aside the demand order dt. 12.08.2013 and the revisional order dt. 30.08.2014 stands upheld.

¶63

Issue for consideration

Whether the defects found in the C-Forms submitted by the respondent-Firm — wrong mention of the Rules year ('The Central Sales Tax (Registration & Turnover) Rules, 1975' instead of '...Rules, 1957') and imperfectly legible writing — are substantial defects justifying withdrawal of the concessional CST rate and demand of tax at the full rate of 10%. +1 more

¶56

Court's answer

No substantial defect with regard to the validity of the C-Form was found; the only defects projected were the wrong mention of the Rules year ('The Central Sales Tax (Registration & Turnover) Rules, 1975' instead of '...Rules, 1957') and imperfectly legible writing.

¶60

Ratio / Principle

The defects found in the C-Forms — the misdescription of the Rules year and the imperfectly legible writing — are just typographical errors and cannot be said to be substantial defects.

¶62

Key takeaways

The learned Single Judge was absolutely justified in setting aside the order dt. 12.08.2013 passed by the Commercial Tax Officer and the order dt. 30.08.2014 passed by the Divisional Deputy Commissioner (revisional authority).ratio¶62

Detailed headnote1 paragraphs

High Court of Chhattisgarh at Bilaspur, Division Bench (Sanjay K. Agrawal & Radhakishan Agrawal, JJ.), order dt. 12.09.2025 [2025:CGHC:46778-DB] — Writ Appeals WA No. 79 of 2021, WA No. 97 of 2021 & WA No. 334 of 2020 (State of Chhattisgarh and commercial tax authorities v. M/s Prakriti Industries and M/s Mohini Industries) DISMISSED with no cost, upholding the learned Single Bench's common order dt. 02.02.2018 in WPT-25-2016, WPT-262016 & WPT-27-2016. Held: the only defects found in the C-Forms furnished by the respondent-firms — description of the Rules as 'The Central Sales Tax (Registration & Turnover) Rules, 1975' instead of '...Rules, 1957', and imperfectly legible writing, flagged on audit objection — are mere typographical errors and not substantial defects; hence the reassessment (order dt. 25.03.2013 under Section 9(2) r/w Section 28(1) of the VAT Act) culminating in the demand order dt. 12.08.2013 for differential CST of Rs.6,26,478/-, and the revisional order dt. 30.08.2014, were rightly set aside, the concessional CST rate of 2% under Section 8 of the Central Sales Tax Act, 1956 having been availed on the strength of the C-Form supplied by the purchasing dealer.

¶1

Page No.1 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶2

2025:CGHC:46778-DB

¶3

Digitally SAIFAN signed by KHAN SAIFAN KHAN

¶4

NAFR

¶5

HIGH COURT OF CHHATTISGARH AT BILASPUR

¶6

WA No. 79 of 2021

¶7

1 - State of Chhattisgarh Through Secretary, Department Of Revenue, Mahanadi Bhawan, Capital Complex, New Raipur, P.S. Rakhi, District Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶8

2 - The Commercial Tax Officer Office Of Commercial Tax, Circle 4, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶9

3 - The Divisional Deputy Commissioner Of Commercial Tax Commercial Tax Office, Division - 1, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶10

--- Appellants

¶11

Versus

¶12

M/s Prakriti Industries Through Proprietor Prasoon Kumar S/o Late Shri Surendra Narayan, Aged About 69 Years, 9 B, Industrial Area, Rawabhata, P.S. Rawabhata, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

--- Respondent

WITH

WA No. 334 of 2020

1 - State of Chhattisgarh, Through Secretary, Department Of Revenue, Mahanadi Bhawan, Capital Complex, New Raipur, Police Station Rakhi, District Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶17

2 - The Commercial Tax Officer, Office Of Commercial Tax, Circle 4, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶18

3 - The Divisional Deputy Commissioner Of Commercial Tax, Commercial Tax Office, Division - 1, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶19

--- Appellants

¶20

Versus

¶21

Page No.2 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶22

M/s Mohini Industries Through Proprietor Ruchir Mayank S/o Shri Prasoon Kumar, Aged About 43 Years, 9 A, Industrial Area, Rawabhata, Police Station Rawabhata, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

--- Respondent

WITH

WA No. 97 of 2021

1 - State of Chhattisgarh, Through Secretary, Department Of Revenue, Mahanadi Bhawan, Capital Complex, New Raipur, Police Station Rakhi, District Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶27

2 - The Commercial Tax Officer, Office Of Commercial Tax, Circle 4, Raipur Chhattisgarh.

¶28

3 - The Divisional Deputy Commissioner Of Commercial Tax, Commercial Tax Office, Division - 1, Raipur Chhattisgarh.

¶29

--- Appellants

¶30

Versus

¶31

M/s Prakriti Industries Through Proprietor Prasoon Kumar S/o Late Shri Surendra Narayan, Aged About 69 Years, 9 B, Industrial Area, Rawabhata, Police Station Rawabhata, Raipur Chhattisgarh., District : Raipur, Chhattisgarh

¶32

--- Respondent

¶33

[Cause-title taken from Case Information System (CIS)]

¶34

For Appellants : Mr. R.S. Marhas, Addl. Advocate General For Respondent : Mr. Hari Agrawal, Advocate

¶35

Division Bench

¶36

Hon'ble Shri Justice Sanjay K. Agrawal & Hon’ble Shri Justice Radhakishan Agrawal

Order on Board

12.09.2025

Sanjay K. Agrawal, J

Regard being had to the similitude of the questions of facts

¶41

and law involved and being arising out of a common impugned order

¶42

Page No.3 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶43

dated 02.02.2018, on the joint request of learned counsel for the parties, all these appeals are clubbed together, heard together and being disposed of by this common order. However, for the sake of clarity, the facts are taken from WA-79-2021 as lead case.

¶44

These batch of writ appeals are directed against a common impugned order dated 02.02.2018, passed in WPT-25-2016, WPT-262016 & WPT-27-2016 by the learned Single Bench of this Court, by which, the writ petitions filed by the respondent herein has been allowed and order dt. 12.08.2013, passed by the Commercial Tax Officer, affirmed vide order dt. 30.08.2014, passed by the Divisional Deputy Commissioner (revisional authority), both have been set aside.

¶45

The facts of the case, in a nut-shell, are that the respondentFirm is engaged in the business of manufacture and sale of chemicals i.e. Chlorinated Paraffin, Hydrochloric Acid, Dechrloro Phenyl etc. and registered with TIN No.22091400952 for assessment of Value Added Tax, Entry Tax and Central Sales Tax. For the financial year 2005-06, the respondent-Firm filed all its quarterly returns and also submitted 18 number of C-Forms. Thereafter, the respondent-Firm was assessed to tax and, after examination, the total inter-State sale was ascertained to be Rs.94,41,973/-. On 22.01.2008, vide assessment order, C-Form sales of the respondent-Firm were taken to be Rs.94,26,977/- and

¶46

Page No.4 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶47

concessional rate of CST @ 2% was imposed under Section 8 of the Central Sales Tax Act, 1956, amounting to Rs.1,84,843/-. Thereafter, on 20.02.2013, after lapse of more than 04 years from the date of passing of the said assessment order, the respondent-Firm was served with a notice to appear before the authorities on 20.03.2013 and to show cause as to why the concession granted on the defective C-Form be rejected and full rate of tax be imposed upon the respondent- Firm.

¶48

Thereafter, on 25.03.2013, the assessing officer by invoking power under Section 9(2) read with Section 28(1) of the VAT Act, reopened the assessment of the respondent- Firm and two C-Forms No.5615192 submitted by the respondent-Firm were held to be defective and, ultimately, by order dt. 25.03.2013, the appellantAuthorities herein observed that the respondent- Firm has paid CST @ 2% i.e. Rs.1,56,619/-, however, due to defective C-Forms, now CST was ascertained to be payable at full rate of 10% and, as such, total CST amounting to Rs.7,83,097/- was demanded to be payable by the respondent-Firm. Against which, the respondent-Firm filed its representation and, in turn, fresh demand was made vide order dt. 12.08.2013, demanding a differential sum of Rs.6,26,478/- from the respondent- Firm. Thereafter, on 14.11.2013, the respondentFirm filed a revision before the Deputy Commissioner of Commercial Tax, Raipur and, vide order 30.08.2014, the Deputy

¶49

Page No.5 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶50

Commissioner, rejected the revision holding that no error has been committed on the part of the assessing authority. Challenging order dt. 30.08.2014, the respondent-Firm filed writ petition (i.e. WPT-262016) before this Court. The learned Single Judge vide its order dt. 02.02.2018 set aide both the orders dt. 12.08.2013 & 30.08.2014 and granted liberty to the appellant-Authorities to initiate action against the purchasing dealer. Feeling aggrieved and dissatisfied with the said order of learned Single Judge, the appellant-State Authorities have filed present writ appeals.

¶51

Mr. RS Marhas, learned Addl. Advocate General would submit that the learned Single Judge is absolutely unjustified in setting aside the orders dt. 12.08.2013 & 30.08.2014 by recording findings which are perverse to the record. Since C-form submitted by the respondent-Firm was found to be defective, therefore, the respondent is liable to pay full tax and not entitled to get concession on it. Hence, the impugned order passed by the learned Single Judge is liable to be set aside.

¶52

Per contra, Mr. Hari Agrawal, learned counsel appearing for the respondent- Firm would submit that the return filed by the respondent- Firm was only defective to the extent of typographical error and no substantial error was found in it, as in the C-Form the rule i.e. “Central Sales Tax Rules, 1957” has wrongly been mentioned as “Central Sales Tax Rules, 1975” and writing is not

¶53

Page No.6 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶54

found perfectly legible and, for which, the respondent-Seller is not responsible. As such, the orders passed by the two authorities has rightly been set aside. Thus, all the appeals are liable to be rejected.

¶55

We have heard learned counsel for the parties, considered their rival submission made herein-above and went through the record with utmost circumspection.

¶56

It is not in dispute that C-Form was supplied to the respondent- Firm by the purchasing dealer and, on the strength of said C-Form, the appellant-Authorities has availed the concessional rate of tax in respect of CST @ 2% instead of 10% vide order 22.01.2008 firstly. However, later on, on the basis of audit objection, as revealed, the assessment of the respondent-Firm was reopened vide order dt. 25.03.2013 and, on account of defective C-Forms, the CST was ascertained to be payable by the respondent-Firm at full rate of 10%. In this regard, Para-05 of the return filed by the appellant-State in the writ petition needs to be noticed herein profitably, which reads as under:

¶57

“ 5. It is humbly submitted that, the present petitioner company has submitted the “C” Form on 22.01.2008 before the Commercial Tax Officer, Circle 4, Raipur (a copy of the “C” Form, submitted by the petitioner company and the actual “C” Form, are being annexed collectively herewith as Annexure R/1 for kind perusal of this Hon’ble Court) in which, during audit, the concerned Auditor has raised objection regarding the default in the “C” Form submitted by the petitioner

¶58

Page No.7 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶59

company whereby specifically pointing out that, in the “C” Form submitted by the petitioner company the rules is wrongly mentioned as “The Central Sales Tax (Registration & Turnover) Rules, 1975” whereas, the same is actually named as “The Central Sales Tax (Registration & Turnover) Rules, 1957 and it is also pointed out that, the writing is not perfectly eligible. A copy of the intimation letter dated 30.04.2009 issued by the Auditor regarding the default in “C” Form submitted by the present petitioner company alongwith the remark of the Auditor, is being annexed herewith as Annexure R/2 for kind perusal of this Hon’ble Court.”

¶60

A careful perusal of the afore-quoted paragraph (return filed by the appellant-State before the writ Court) would show that no substantial defect with regard to validity of the form was found. The only defects which were found and projected in C-Form submitted by the respondent-Firm before the writ Court were: (i) the rules is wrongly mentioned as “The Central Sales Tax (Registration & Turnover) Rules, 1975” whereas, the same is actually named as “The Central Sales Tax (Registration & Turnover) Rules, 1957” and (ii) the writing is not found perfectly legible in it, which is on the basis of audit objection/report dt. 30.08.2014. In our considered opinion, the aforesaid defects found in C-Form submitted by the respondentFirm are not substantial defects. The only defects which have been found before the writ Court are: (i) the rules is wrongly mentioned as “The Central Sales Tax (Registration & Turnover) Rules, 1975” whereas, the same is actually named as “The Central Sales Tax

¶61

Page No.8 of 8 IN WA-79-2021, WA-97-2021 & WA-334-2020

¶62

(Registration & Turnover) Rules, 1957” and (ii) the writing is not found perfectly legible in it, which are just typographical error and cannot be said to be substantial defects. Therefore, the learned Single Judge is absolutely justified in setting aside the orders dt. 12.08.2013, passed by the Commercial Tax Officer and dt. 30.08.2014, passed by the Divisional Deputy Commissioner (revisional authority).

¶63

We do not find any merit in these writ appeals and same are hereby dismissed . No cost.

¶64

sd/sd/(Sanjay K. Agrawal) (Radhakishan Agrawal) Judge Judge

¶65

s@if

State of Chhattisgarh, v. M/s Prakriti Industries

Case brief

What is this about?

What did the court decide?

State of Chhattisgarh, v. M/s Prakriti Industries

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Union of India Vs Raghunath

Union of India, Vs Devanand

Union of India Vs Balakram

Smt. Khomin Nayak Vs the State of Chhattisgarh

State of Chhattisgarh, Vs M/s Mohini Industries

State of Chhattisgarh Vs M/S Prakriti Industries