Case Law Details
Sheel Chand Agroils (P) Ltd. Vs Government of NCT of Delhi & Anr. (Delhi High Court)
Rule 8A of the CST Delhi Rules makes the issuance of manual forms redundant. All forms now are generated electronically through the website of the DTT and qua particular transactions/suppliers. He accordingly submits that there was no occasion for the VAT Commissioner to invoke Rule 8 (10) read with Rule 8 (11) of the CST Delhi Rules to cancel the F Forms already issued to the Petitioner. The present petition also challenges Rule 8 (10) of the CST Delhi Rules as being ultra vires the Rule making power of the Government under Section 13 (4) (e) of the CST Act.
The Court is satisfied that the Petitioner has made out a prima facie case for grant if an ad interim order in its favour. It is accordingly directed that till the next date of hearing, the impugned notification dated 18thJune, 2018 issued by the Respondent No.2 shall remain stayed.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
1. Exemption allowed, subject to all just exceptions.
W.P.(C) 3245/2019 & CM Appl.No. 14889/2019 (stay)
2. Notice. Mr. Shadan Farasat, Advocate accepts notice for the Respondents. Counter affidavit be filed within four weeks. Rejoinder be filed before the next date.
3. The Petitioner is a registered dealer located in Uttarakhand and is engaged in the business of manufacturing and trading of edible oils, fats and oleo chemicals. The Petitioner supplied edible oil on stock transfer basis to one M/s Kumar & Company registered under the Central Sales Tax Act and located in Delhi during the Financial Years (FYs) 2014-15 & 2015-16. It is stated that ‘edible oil’ is mentioned in the Registration Certificate Form B, issued by the Delhi VAT Authorities under the CST Act to the said Kumar & Company.
4. For the sales made of the edible oil, Kumar & Company made payments to the Petitioner through banking channels and issued Form F prescribed under Section 6A of the CST Act read with Rule 12(5) of Central Sales Tax (Registration & Turnover) Rules, 1957 (CST R & T Rules). A total of twelve Form F forms were issued to the Petitioner by the said Kumar & Company during 2014-15 & 2015-16. The details of these forms have been set out in para 5 of the Petition. These forms were generated electronically from the online portal of Department of Trade and Taxes, (DT&T) Govt. of NCT of Delhi (GNCTD). On its part, the Petitioner verified that the forms were valid before furnishing them to the Assessing Authority in Uttarakhand.
5. On 18thJune, 2018 the VAT Commissioner (Respondent No. 2) in Delhi in purported exercise of the powers under Rule 8 (10) of the Central Sales Tax (Delhi) Rules, 2005 (“CST Delhi Rules”) issued a notification cancelling the aforementioned twelve F Forms issued by Kumar and Company to the Petitioner as obsolete and invalid for all purposes with immediate effect. This was reflected on the DVAT portal with the date of the cancellation as 15th June, 2018.
6. The Petitioner apprehends that in view of the aforementioned cancellation of the Forms-F, the Petitioner will now be called upon by its Assessing Authority in Uttarakhand to pay CST by treating the transaction of stock transfer as an the inter-state section under the deeming section of Section 6A of CST Act.
7. Puneet Agrawal, learned counsel for the Petitioner, refers to Rule 8 (10) of the CST Delhi Rules and submits that it was meant to weed out unused manual forms and not for cancelling forms already issued. In other words, it is submitted that Section 6A of CST Act is intended to de-commission unused forms, which position becomes clear on a combined reading of Rule 8 (10) with Rule 8 (11) of the CST Delhi Rules. Mr. Agrawal submitted that there is no power in the VAT Commissioner under the aforementioned rules to declare used forms as obsolete. The power is only to declare unused forms of a particular series, colour and design, as obsolete.
8. Mr. Agrawal also pointed out that Rule 8A of the CST Delhi Rules makes the issuance of manual forms redundant. All forms now are generated electronically through the website of the DTT and qua particular transactions/suppliers. He accordingly submits that there was no occasion for the VAT Commissioner to invoke Rule 8 (10) read with Rule 8 (11) of the CST Delhi Rules to cancel the F Forms already issued to the Petitioner. The present petition also challenges Rule 8 (10) of the CST Delhi Rules as being ultra vires the Rule making power of the Government under Section 13 (4) (e) of the CST Act.
9. In reply, Mr. Shadan Farasat, learned counsel for the Respondent relies on an order passed by this Court on 23rdJuly, 2018 in WP(C) No. 7563/2018 (M/s. Jai Gopal International Impex Pvt. Ltd. v. Commissioner of Delhi Value Added Tax) which in turn relied on the decision of this Court in Jain Manufacturing (India) Pvt. Ltd. v. Commissioner of Value Added Tax (2016) 93 VST 326 (Del) granting the Assessee in that case relief in similar circumstances. He pointed out that the said order relief has been stayed by the Supreme Court in SLP (C) No. 27177/2018 by an order dated 22nd October, 2018 and which stay has continued.
10. A careful examination of the order in M/s. Jai Gopal International Impex Pvt. Ltd. (supra) reveals that a parallel cannot be drawn between the facts of the said case and that the case on hand.
11. The Court is satisfied that the Petitioner has made out a prima facie case for grant if an ad interim order in its favour. It is accordingly directed that till the next date of hearing, the impugned notification dated 18thJune, 2018 issued by the Respondent No.2 shall remain stayed.
12. List on 5th August, 2019.
