Case Law Details

Case Name : Prayas Automation Pvt. Ltd. Vs State of Tripura (Tripura High Court)
Appeal Number : WP(C) No. 364/2016
Date of Judgement/Order : 22/03/2021
Related Assessment Year :

Prayas Automation Pvt. Ltd. Vs State of Tripura (Tripura High Court)

From the reply filed by the State authorities, it emerges that such ‘C’ Forms were not issued on account of anomaly in the valuations. As a State authority respondent No. 4 ought to have conveyed this reason to the petitioner who could have either pointed out that there is no anomaly or reconcile the figures if it was possible. In the meantime, for want of ‘C’ Forms the petitioner went on suffering duty at the higher rates. The Assessing Officer in West Bengal who had jurisdiction over the petitioner could not postpone the assessments for the fear of the same getting time barred.

In the result, petition is disposed of with following directions:

(i) The respondent No.2 shall communicate the mismatch in figures which has prevented the said respondent from issuing “C”Form so far to the petitioner as well as respondent No. 4 simultaneously within a period of two weeks from today;

(ii) Upon receipt of such communication, the petitioner would have four weeks time thereafter to file a response to explain the discrepancy or to reconcile the figures;

(iii) The respondent No.2 thereupon shall issue “C”Forms in relation to the transactions in question to the extent legally justified. This exercise shall be completed within four months of the date of receipt of the clarification from the petitioner;

(iv) We have not made any observations with respect to the rate of tax that the transaction would attract. It would be the assessing authority of the petitioner to go into that question if the same ever arises or if permissible in law, for the respondent No.2 to take into consideration;

(v) We have also not expressed any opinion on the manner in which the petitioner can take benefit of concessional rate of duty even if “C” Forms were to be eventually issued and leave it to the petitioner to follow the remedies, if any, available in law.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Petitioner has prayed for a direction to the respondents No.3 and 4 to issue “C” Form for the years 2007-08 to 2010-11 so that the petitioner can avail of the concessional rate of duty on the goods supplied from outside State.

2. Brief facts are as under:

Respondents No. 1 to 3 are State authorities. Respondent No.3 in particular is a Principal Secretary of Power Department of the Government of Tripura. Respondent No.4 is a Managing Director of Tripura State Electricity Corporation Limited (hereinafter to be referred to as TSECL). TSECL had floated a tender for installation and erection of transmission lines. The petitioner which is a Kolkata based company, had participated in this tender process. The tender of the petitioner was accepted and for three different projects work orders were issued in December, 2008 and January & July, 2009. Clause 13 which is common in all agreements pertains to taxes and duties. As per Clause 13.1 the petitioner would pay all the customs duties, excise duties, sales tax etc. However, as per Clause 13.2 TSECL would provide concessional sales tax declaration in prescribed forms which is popularly come to be known as “C”Form. This Clause reads
as under:

“13.2. Concessional Sales Tax declaration forms, as admissible, shall be issued to the Contractor, on request, for all items (as identified in the price schedule of the Bid) to be supplied directly by the Contractor as well as for the items to be supplied by the Sub-suppliers as sale-in-transit.”

3. The case of the petitioner is that in the course of execution of the work awarded to the petitioner by respondent No.4, the petitioner had supplied materials directly to the respondent No.4. Such materials were provided from outside the State and, therefore, would invite concessional rate of duty. To enable the petitioner to claim such concessional rate of duty, the petitioner would require “C”Form that the respondent No.4 would obtain from the respondents No.1 and 2 authorities and provide to the petitioner. According to the petitioner a total sum of Rs.40,90,581/- is blocked for the said period between 2007-08 to 2010-11 and the petitioner is unable to claim return as “C”Form has not been issued by the respondent No.4.

4. The respondent No.4 has appeared and filed a reply in which the stand taken is that the petitioner is a registered dealer under the provisions of the Tripura Value Added Tax Act, 2004 and Central Sales Tax Act, 1956 in the State of Tripura and it is a supplier of the materials to the respondent No.4. The petitioner, therefore, cannot claim “C” Form in relation to such transactions. The petitioner can claim “C” Form only from the authority under whose jurisdiction the petitioner is registered. In fact, the respondent No.4 in the affidavit-in-reply has disputed the petitioner‟s claim for payment of duty at concessional rate.

5. The respondents No.1 and 2, i.e. the taxing authorities of the State of Tripura have, however, taken a different stand. The stand taken by
the said authorities as emerging from an affidavit-in-reply dated 05.11.2016 is as under:

“9. That, in reply to the averments and/or contentions made in paragraph 5 to 14 of the Writ Petition I state that, the Respondents No.4, TSECL has applied for issuance of 10 (ten) Nos. C-Form on 25.06.2012, out of which 8(eight) Nos. C-Forms were issued to the dealer on 26.06.2012 keeping aside the the remaining 2(two) Nos. C-Forms. But, the rest 2(two) Nos. of C Form as per requirement of dealer which are relating to the billing of Prayas Automation Pvt. Ltd. 948, South Kumrakhali, Sonarpur Station Road, P.O. Narendrapur, Kolkata-700103 bearing invoice nos. TI 0802038 dated 29.02.2008 and TI 0711028 dated 01.11.2007 having value Rs.33,01,750.00 and Rs.43,53,542.00 respectively were not issued to the dealer due to huge value difference coming out from the “utilization of C Form to the extent on permits obtained”. The dealer was asked to explain in writing with supporting documents/papers why the difference value was occurred. But still the dealer fails to produce any explanation for adjudication of the said issue which appears to be the practice on the part of the dealer. Otherwise no application was received from the TSECL for issuance of C Form relating to the billing of Prayas Automation Pvt. Ltd. 948, South Kumrakhali, Sonarpur Station Road, P.O. Narendrapur, Kolkata-700103, in respect of Year 2009-10 & 2010-11 as claimed by the Petitioner. I also state that in respect of issuance of C-Form of the petitioner respondent No.4 is suppose to apply “Requisition Statement”of required C Form along with copies of permits, invoice etc. to the Superintendent of Taxes Charge-I, Agartala.

A copy of letter dated 25.06.2012 and a Statement of „C‟ Form Requisition of TSECL Dated. 26.06.2012 are annexed here with and marked as Annexure-R/1 & R/2 respectively.”

6. Appearing for the petitioner, learned counsel Mr. T.K. Deb pointed out that as per the taxing authorities the reason for not granting „C‟ Form was the mismatch in the valuation. The respondent No.4 on the other hand has now taken a different stand namely that no such “C”Forms can be issued at all. This according to the counsel is a wholly untenable argument.

7. Learned counsel Mr. A. Nandi appeared for respondents No.1 to 3 and submitted that there is no prayer made against the said authorities. In any case, he abides by the affidavit-in-reply filed on behalf of the said respondents. We may recall respondent No.4 in the affidavit-in-reply has cited a reason that the petitioner being a registered dealer in Tripura, cannot claim “C”Form from the respondent No.4; which itself we find a somewhat of a strange argument. However, learned counsel for the petitioner pointed out that the petitioner had obtained registration in State of Tripura only on 01.10.2011 which was subsequent to the period in question. When confronted with this fact, counsel for the respondent argued that the petitioner ought to have got itself registered earlier and in any case, looking to the nature of the transaction, the petitioner was not eligible to claim concessional rate of duty.

8. The situation that emerges from the record is that the petitioner at the relevant time was a registered dealer in West Bengal. Since the petitioner was awarded a contract for execution of certain work for respondent No.4 in Tripura, the petitioner and respondent No.4 appeared to have entered into an agreement which is manifested in Clause 13.2 that on the goods supplied by the petitioner directly to respondent No.4, the respondent No.4 shall issue certificate of concessional rate of duty. According to the petitioner, the goods supplied were in the course of interstate trade. The objections of the respondent No.4 for issuing “C”Form are completely invalid. As noted in the affidavit-in-reply, the main ground taken was that the petitioner was a registered dealer in the State of Tripura, which itself being somewhat of a strange ground, in any case, in fact the petitioner was not a registered dealer in the State of Tripura at the relevant time. The expansion of the opposition of the respondent No.4 by its advocate through oral arguments, is also wholly unsustainable in law. The respondent No.4 does not hold the authority to decide the taxability of the sale in question. Whether the sale should invite concessional rate of duty or not is to be judged by the taxing authorities. It was perhaps because of this reason that the respondent No.4 itself had also approached the VAT department for issuance of “C”Forms. From the reply filed by the State authorities, it emerges that such “C”Forms were not issued on account of anomaly in the valuations. As a State authority respondent No.4 ought to have conveyed this reason to the petitioner who could have either pointed out that there is no anomaly or reconcile the figures if it was possible. In the meantime, for want of “C”Forms the petitioner went on suffering duty at the higher rates. The Assessing Officer in West Bengal who had jurisdiction over the petitioner could not postpone the assessments for the fear of the same getting time barred.

9. Be that as it may, in peculiar facts of the case, we propose to issue directions to the respondents No.2 and 4 to point out the difference in the figures which has prevented the respondent No. 2 to issue a “C” Form to respondent No.4 to be given to the petitioner. Upon such communication the petitioner would have opportunity to clarify or reconcile the figures. Thereupon, the respondent No.2 shall issue “C” Form to respondent No.4 as may be justified. However, before doing this, one aspect needs to be clarified. We have not commented on the claim of the petitioner for concessional rate of duty on the sales in question. We have devised this methodology in view of the fact that not the respondent No.2 but the respondent No.4 who is not a taxing authority is raising the question of appropriate rate of tax which is not permissible in law.

10. In the result, petition is disposed of with following directions:

(i) The respondent No.2 shall communicate the mismatch in figures which has prevented the said respondent from issuing “C”Form so far to the petitioner as well as respondent No.4 simultaneously within a period of two weeks from today;

(ii) Upon receipt of such communication, the petitioner would have four weeks time thereafter to file a response to explain the discrepancy or to reconcile the figures;

(iii) The respondent No.2 thereupon shall issue “C”Forms in relation to the transactions in question to the extent legally justified. This exercise shall be completed within four months of the date of receipt of the clarification from the petitioner;

(iv) We have not made any observations with respect to the rate of tax that the transaction would attract. It would be the assessing authority of the petitioner to go into that question if the same ever arises or if permissible in law, for the respondent No.2 to take into consideration;

(v) We have also not expressed any opinion on the manner in which the petitioner can take benefit of concessional rate of duty even if “C” Forms were to be eventually issued and leave it to the petitioner to follow the remedies, if any, available in law.

11. Pending application(s), if any, stands disposed of.

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