Case Law Details
Zapsell Retail Vs Commissioner State Goods And Services Tax (Delhi High Court)
In Jain Manufacturing (India) Pvt. Ltd. v. The Commissioner Value Added Tax & Anr. (W.P.(C) 1358 of 2016 decided on 06.2016) this Court had held that C-forms cannot be cancelled retrospectively. Further, this Court has disposed of several writ petitions involving the similar issue by following the decision in Jain Manufacturing (India) Pvt. Ltd v. The Commissioner Value Added Tax & Anr. (supra).
This Court is informed that the respondents did not appeal against the decision in Jain Manufacturing (India) Pvt. Ltd v. The Commissioner Value Added Tax & Anr. (supra). However, the respondents have preferred Special Leave Petitions (SLP) against some of the decisions that were rendered following Jain Manufacturing (India) Pvt. Ltd v. The Commissioner Value Added Tax & Anr. (supra); the lead matter being the SLP arising from the decision in M/s Jai Gopal International Impex Pvt. Ltd. v. Commissioner of Delhi Value Added Tax & Anr.: (W.P.(C) 7563 of 2018 decided on 23.07.2018)
The decision in the case of Jain Manufacturing (India) Pvt. v. The Commissioner Value Added Tax & Anr. (supra) is binding on this Court and therefore, the benefit of the C-Forms in question cannot be denied to the petitioner, by cancelling the same retrospectively.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, inter alia, praying as under:
a) issue a writ of declaration or any other writ, order or direction in the nature thereof declaring that the C Forms issued, (Annexure P-2) under the Central Sales Tax (Registration & Turnover) Rules, 1957 by the Dealers registered with the Respondent are valid qua the Petitioner;”
2. The petitioner is engaged in the business of sale and purchase of electronic items and at the material time was registered as a dealer under the provisions of the Central Sales Tax Act, 1956 (hereafter ‘CST Act’) and Haryana Value Added Tax Act, 2003 (hereafter ‘HVAT Act’). After the roll out of the Goods and Services Tax regime (hereafter ‘GST regime’), the petitioner has migrated to the GST regime and is registered under the Goods and Services Tax Act, 2017.
3. The petitioner is, essentially, aggrieved by denial of the concessional rate of duty in respect of certain inter-state sales made to M/s Shree Ram Overseas (TIN-0745043 1050) (hereafter ‘the purchasing dealer’), a dealer registered under the Delhi Value Added Tax Act, 2004 (hereafter ‘DVAT Act’) against declaration in Form C prescribed under the Central Sales Tax (Registration & Turnover) Rules, 1957 (hereafter ‘CST Rules’).
4. The C-forms submitted by the petitioner in respect of the sales made to the purchasing dealer in the 1st and 2nd Quarter of the Financial Year 2016-17, were not verifiable online. However, the C-forms submitted for the 3rd Quarter of the said Financial Year were accepted.
5. The respondents have filed a counter affidavit, inter alia, stating that on the basis of the information received from the Enforcement Directorate regarding investigation under the Prevention of Money Laundering Act 2002 (hereafter ‘PMLA’), against certain firms registered under DVAT Act, a notice under Section 59(2) of the DVAT Act (being Ref no.: 10486004) was issued to the purchasing dealer on 12.04.2018 directing it to produce financial records pertaining to the period on or before 19.04.2018. However, no response was received from the purchasing dealer to the notice dated 12.04.2018. The purchasing dealer did not furnish any document to verify the purchases made by it. Consequently, cancellation proceedings of the C-forms were initiated against the purchasing dealer.
6. The learned counsel for the petitioner states that the website of respondent no.1 reflects that the purchasing dealer is registered with the respondents since 08.08.2012 and submits that there is no provision under the CST Act for cancellation of declaration forms.
7. He relies on the decision of this Court in Maa Jagdamba Traders v. Commissioner Value Added Tax (P. (C) No. 13365 of 2018 decided on 09.07.2019), whereby this Court had held as under:
5. A collective reading of both the sub rules makes it clear that once the form that has been issued is utilized, the question of subsequently declaring such used forms as obsolete would not arise. Rule 5(14) makes the requirement of surrender of the ,,unused forms of the series design or colour that have been rendered obsolete clear and provides that only for such unused forms would new forms be issued. It is, therefore, plain that the above rules do not permit the CVAT to declare forms that have already been issued and acted upon as obsolete.”
8. The aforementioned view has been followed by this Court in Sheel Chand Agroils P. Ltd. v. Government of NCT of Delhi (P. (C) 3245 of 2019 decided on 05.08.2019)
9. Learned counsel for the respondents submit that the aforementioned decision of this Court in Maa Jagdamba Traders v. Commissioner Value Added Tax (supra), has been challenged by the department by filing a Special Leave Petition (being SLP(C) 13123 of 2019 and 16088 of 2020). The Supreme Court has issued notice, and stayed the orders dated 30.10.2018 and 09.07.2019 passed by this Court.
10. In Jain Manufacturing (India) Pvt. Ltd. v. The Commissioner Value Added Tax & Anr. (W.P.(C) 1358 of 2016 decided on 06.2016) this Court had held that C-forms cannot be cancelled retrospectively. Further, this Court has disposed of several writ petitions involving the similar issue by following the decision in Jain Manufacturing (India) Pvt. Ltd v. The Commissioner Value Added Tax & Anr. (supra).
11. This Court is informed that the respondents did not appeal against the decision in Jain Manufacturing (India) Pvt. Ltd v. The Commissioner Value Added Tax & Anr. (supra). However, the respondents have preferred Special Leave Petitions (SLP) against some of the decisions that were rendered following Jain Manufacturing (India) Pvt. Ltd v. The Commissioner Value Added Tax & Anr. (supra); the lead matter being the SLP arising from the decision in M/s Jai Gopal International Impex Pvt. Ltd. v. Commissioner of Delhi Value Added Tax & Anr.: (W.P.(C) 7563 of 2018 decided on 23.07.2018)
12. The decision in the case of Jain Manufacturing (India) Pvt. v. The Commissioner Value Added Tax & Anr. (supra) is binding on this Court and therefore, the benefit of the C-Forms in question cannot be denied to the petitioner, by cancelling the same retrospectively.
13. The petition is, accordingly, allowed.
