Case Law Details

Case Name : TATA Hitachi Construction Machinery Company Pvt. Ltd. Vs State of Karnataka (Karnataka High Court)
Appeal Number : STRP No. 211/2015
Date of Judgement/Order : 11/03/2020
Related Assessment Year :
Courts : All High Courts (5994) Karnataka High Court (302)

TATA Hitachi Construction Machinery Company Pvt. Ltd. Vs State of Karnataka (Karnataka High Court)

The issue under consideration is whether Tribunal was correct in rejecting the C-Forms submitted by the petitioner and hence denying statutory benefits?

The Appellate Tribunal at the threshold has rejected the declaration forms on the ground of delay. It is well settled that the statutory declaration forms would be accepted by the Appellate Authority keeping in mind the inter-state transactions effected and the sufficient cause shown by the assessee in obtaining such declaration Forms from the purchasers. Merely for the reason that C-Forms are filed belatedly, it cannot be rejected. It is apparent that the petitioner has not placed on record satisfactory material to establish the circumstance of consignment agent and purchasers withholding the concerned declaratory Forms disabling the petitioner in producing the same within the relevant time prescribed under Rule 12(7) of the Rules. Similarly, the original C-Forms now placed before this Court requires to be examined in the light of the material to be placed by the petitioner to substantiate the reasons for the delay subject to authenticity of the documents.

It is not in dispute that concessional levy of tax which is provided by the legislature is to the benefit of the assessee, if such benefit is denied on technicalities, the purpose and object of extending the concessional rate of tax would be defeated.

Hence, in the circumstances, HC deem it appropriate to remand the matters to the Appellate Tribunal to reconsider the applications submitted by the petitioner for production of C-Forms as well as original C-Forms now furnished before this Court. The Appellate Tribunal shall re-examine the matters.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Since similar and akin issues are involved in these petitions, they are clubbed, heard together and disposed of by this common order.

2. These Sales Tax Revision Petitions are filed under Section 65(1) of the Karnataka Value Added Tax Act, 2003 (for short ‘the KVAT Act’) purportedly raising the following substantial questions of law:

i) Whether the Hon’ble Tribunal was correct in confirming the order of the First Appellate Authority, whereby penalty under Section 72(2) of the Karnataka Value Added Tax Act, 2003 was imposed on the petitioner.

ii) Whether the Hon’ble Tribunal was correct in confirming the order of the First Appellate Authority, whereby interest under Section 36 of the Karnataka Value Added Tax Act, 2003 was imposed on the petitioner.

iii) Whether the Hon’ble Tribunal was correct in rejecting the C-Forms submitted by the petitioner vide interim application No.3 filed under Rule 36(b) of the Karnataka Appellate Tribunal Regulations, 1979.

iv) Whether, on the facts and circumstances of the case, the Tribunal should have granted additional time to the petitioner to produce the C-Forms that are produced along with the Interlocutory Application accompanying the petition.

3. The facts briefly stated are that the petitioner is a company incorporated under the Companies Act, 1956 and is engaged in the manufacturing of earthmoving equipments such as hydraulic excavators, excavator loaders, wheel loaders, transit mixers, compactors, motor graders, cranes etc. The petitioner is a registered dealer under the provisions of the KVAT Act as well as Central Sales Tax Act, 1956 (for short ‘CST Act’). The petitioner claims that relating to the tax periods April 2005 to March 2007, the turn over on the interstate sales of equipments, machineries and spares not covered by C-Forms were subjected to higher rate of tax by the Assessing Authority. The Assessing Authority had levied penalty and interest under Section 72(2) and Section 36 of the KVAT Act. Aggrieved by the said assessment order, the petitioner preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals), Dharwad (First Appellate Authority). The First Appellate Authority placing reliance on the decision in A .S.Nasiruddin Vs . Commissioner of Commercial Taxes reported in (1994) 94 STC 399 (Kar .) has considered the additional C-Forms that have been submitted before it and computed the tax liability giving concessional rate of tax on the turnover accompanied with C-Forms and subjected to regular rate of tax with respect to the turnover not covered by C-Forms in addition to levy of penalty and interest. However, before the Karnataka Appellate Tribunal, Bengaluru (for short ‘the Appellate Tribunal’), the additional C-Forms submitted by the petitioner relating to the tax periods April 2005 to March 2007 (STRP No.211/2015 and STRP No.100022/2016) along with an interim application came to be rejected. Hence, the present revision petitions.

4. In STRP No.100017/2016 relating to the tax periods April 2008 to March 2009, the petitioner has filed I.A.No.2/2016 before this Court seeking permission to produce C-Forms and as such 10 original C-Forms are also placed before this Court along with the said application.

5. The learned counsel for the petitioner would submit that the Appellate Tribunal failed to provide reasonable opportunity to the assessee to furnish the declaratory forms. The inter-state sales effected by the petitioner being eligible to concessional rate of tax in terms of 8(1) of the CST Act, as such, opportunity being denied, the taxable turnover determined by the First Appellate Authority and confirmed by the Appellate Tribunal is not justifiable.

6. The learned AAG placing reliance on Rule 12(7) of the Central Sales Tax (R & T) Rules, 1957 (for short ‘the Rules’) would submit that the burden lies on the assessee to establish that assessee was prevented by sufficient cause from furnishing such declaration or certificate within the period of three months prescribed under Rule 12(7) of the Rules and the authority is empowered to allow declaration or certificate to be furnished within such further time as that authority may permit if satisfied with the sufficient cause shown. In the absence of sufficient cause shown by the petitioner, the Appellate Tribunal rejected the applications filed by the assessee to furnish declaration forms at the belated stage relating to the tax period April 2005 to March 2007.

7. Learned AAG further submitted that application (I.A.No.2/2016) filed by the assessee along with original declaration Forms before this Court without sufficient cause shown cannot be entertained.

8. As aforesaid, though several questions of law are purportedly raised by the petitioner more particularly relating to levy of penalty and interest, these questions could be considered subject to the consideration of the C-Forms and its genuineness if found to be acceptable. The Appellate Tribunal at the threshold has rejected the declaration forms on the ground of delay. It is well settled that the statutory declaration forms would be accepted by the Appellate Authority keeping in mind the inter-state transactions effected and the sufficient cause shown by the assessee in obtaining such declaration Forms from the purchasers. Merely for the reason that C-Forms are filed belatedly, it cannot be rejected. It is apparent that the petitioner has not placed on record satisfactory material to establish the circumstance of consignment agent and purchasers withholding the concerned declaratory Forms disabling the petitioner in producing the same within the relevant time prescribed under Rule 12(7) of the Rules. Similarly, the original C-Forms now placed before this Court requires to be examined in the light of the material to be placed by the petitioner to substantiate the reasons for the delay subject to authenticity of the documents.

9. It is not in dispute that concessional levy of tax which is provided by the legislature is to the benefit of the assessee, if such benefit is denied on technicalities, the purpose and object of extending the concessional rate of tax would be defeated.

10. Hence, in the circumstances, we deem it appropriate to remand the matters to the Appellate Tribunal along with I.A. filed in W.P.No.100017/2016 to reconsider the applications submitted by the petitioner for production of C-Forms as well as original C-Forms now furnished before this Court. The Appellate Tribunal shall re-examine the matters in the light of the observations made hereinabove keeping in mind the ruling of this Court in the case of Fosroc Chemicals (India) Private Limited Vs State of Karnataka1 on the aspect of penalty and interest is concerned and an appropriate decision shall be taken in accordance with law in an expeditious manner in any event not later than eight weeks from the date of receipt of certified copy of this order. Accordingly, the proceedings are restored to the file of the Appellate Tribunal.

11. It is made clear that we have not expressed any opinion on the questions of law now raised by the petitioner in view of the necessity of taking a decision by the Appellate Tribunal on the C-Forms as aforesaid. Registry shall return all the original C-Forms forthwith to the petitioner filed before this Court, keeping the photocopies of the same for the record purpose to enable the petitioner to place the same before the Appellate Tribunal.

With the aforesaid observations and directions, the petitions stand disposed of.

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