Calcutta High Court in Cipla Limited vs Deputy Commissioner, Commercial Tax reported as VSTI 2013 Vol. 17 B-509 has held that There is nothing in Rule 12(5) of CST (R&T) Rules which could be construed to vitiate a declaration form i.e “F” form on a ground that such declaration form covered transactions for a period of more than a month.

The High Court in nut shell held that one F form can cover transactions of more than one month also, as Rule 12(5) of CST (R&T) Rules 1957, uses the word “may” and not “shall” while prescribing the periodicity of F forms.

Statutory Provisions: Rule 12(5) of the CST (R&T) Rules, 1957 provides the time period for the F Forms. The first proviso to Rule 12(5) runs as under:

“PROVIDED THAT a single declaration in F forms may cover transfer of goods, by a dealer, to any other place of his business or to his agent or principal as the case may be, effected during a period of one calendar month.”

It is notable here that the above proviso uses the word “may” and not “shall”, which has been interpreted in the said judgement in the way that Rule 12(5) nowhere poses a restriction that a single declaration in F form cannot cover transactions of branch transfers of more than one calendar month.

Facts of the case: In the abovesaid case the claim of the petitioner regarding inter-state branch transfer u/s 6A of the CST Act, 1956 was disallowed on the ground that the F forms were not received on monthly basis but on quarterly basis.

The lower authority concluded that  F forms produced by the petitioner before it, covered transaction of stock transfer for more than one month in violation of Rule 12(5) of the CST (R&T) Rules, 1957, hence benefit of section 6A was denied.

Verdict of High Court: On a writ petition, the High Court held as under:

“It appears that the Additional Commissioner, Commercial Taxes, West Bengal has misconstrued Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957 which provides that the declaration referred to in sub-section (1) of Section 6A of the Central Sales Tax Act, 1956 shall be in form F. The proviso to Rule 12(5) provides that a single declaration might cover transfer of goods, by a dealer, to any other place of business, or agent, or principal as the case may be, effected during a period of one calendar month. There is nothing in the rules which can be construed to vitiate a declaration form only on the ground that it covers transactions exceeding a period of over one month. The assessment has apparently been revised suo moto and ex parte on a misconception of rule 12(5) of the Rules. The impugned order is, thus, set aside and quashed.”

Thus from the above Judgement it is clear that one F form if cover transactions of branch transfer of a period of more than one month, it cannot be held as invalid form, as the words mentioned in Rule 12(5) is “may”.

This judgement should also apply to C forms: It is pertinent to mention here that 2nd proviso to the Rule 12(1) which talks about the periodicity of C forms, also uses the word “may”, which means that the above said judgement should also mutatis mutandis apply to the periodicity of C forms. The said proviso runs as under:

“Provided further that a single declaration may cover all transactions of sale which takes place in a quarter of a financial year between the same two dealers.”

Thus it is clear from the above proviso that it is not mandatory that C forms should only cover inter-state transactions of sale between two dealers, taken place in a quarter.

If the declaration in C forms cover transactions of more than a quarter in a financial year, that is to say, if a single declaration in C form cover transactions of sale of say 6 months,  the same cannot be rejected on this sole ground.

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Read Other Articles from Advocate Amit Bajaj

(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amit@amitbajajadvocate.com, M +919815243335)

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14 responses to “F form under CST Act can cover transactions of a period more than one month”

  1. Vijay Ajmera says:

    if anyone have full copy of judgment, please forward soft copy of the same

  2. DEVANG. says:

    IF GOODS DESPATCHED FROM ASSAM ON 23.01.2015, REACHED GUJARAT ON 05.02.2015 . WHAT SHOULD BE THE PERIOD OF FORM-F?

  3. DEVANG. says:

    IF GOODS DESPATCHED ON 23.01.2015 FROM ASSAM, REACHED GUJARAT ON 05.02.2015. WHAT SHOULD BE THE PERIOD OF FORM-F.?

  4. Anup kashyap says:

    Dear Sir
    I want to that if transfer spare part/ material for jobwork for other state after the completion the jobwork that is converted in machinery
    get back that machinery .
    May I know what formality to be completed by me.

    Regards

  5. R. Ramamurthy says:

    Problem in respect of transactions covering morethan One calender month in single Form is cropped in Karnataka appears to be on account of AG’s Audit objection and Hon’ble High Court of Karnataka has also issued notice to the State of Karnataka and the assessing Authority and the matter is pending. Any how the decision of Hon’ble High Court of Calcutta in CIPLA Ltd and decision of Bimetal Bearing Ltd of Hon’ble High Court of Madras may be appreciated in the course of arguments and hopefully Governement of Karnataka -commercdal Tax department may also accept above judgments and relieve the dealers from the huge burden created on technical defects

  6. pramod phadke says:

    Decision of Bi Metal is reported in 90STC page 128

  7. pramod phadke says:

    There is a decision by Madras High Court in 1992 in case of M/S BiMetal Corpn wherein similar view was taken I am not aware whether the decision was quoted in Calcutta High Court

  8. CA Ashutosh shrivastava says:

    Can you provide full text of the judgement

  9. S.DurairajGanapathy says:

    Sir,

    It is lanmark judgement be helpful to dealers as well as tax consultants . Further more , for the same and similar issue the learned Appellate Commissioner(CT) Erode, Tamil Nadu has given the very same verdict for earlier assessment year prior to 1.10.2005, the Single Form F is valid and accept for even received for a whole year

  10. pvramarao says:

    It is a very helpful all the trade and also Department for relaxation of the periodicity in respect of C & F forms.All the States have to be followed.

  11. RAJESH KUMAR MORWAL says:

    It is good if it is applicable in all States of India.

  12. jignesh shah says:

    Sir
    Thanks for this valuable information. Is this judgement is applicable to all states in india or it is applicabble to West bangal only.
    Further if material is gone out of state for job work only then F form can be issued to the job worker of other state. As in Maharashtra they are not allowing. As per dept F form can be issued to the agent or branch registered with the dept only & not to job worker. Further we can not registered every job worker as our agent as they might be do the job work for other dealer

    If you can check & share any judgement relating to this it will be greatful to you

  13. Harsh Vardhan Mangal says:

    It is a landmark judgement. It will halp dealers.

  14. Ramamurthy.R says:

    The Decision of the Hon’ble High Court will relieve many dealers who are similarly situated. Rule should be relaxed to achieve the objects. Object is to tax a that a transaction depending upon the State in which it is taxed and to see the taxes are not multiplied so as to make a product unreachable to the Citizen. When once tax is paid in another state and just because there is one consolidated F form subjecting the a transaction which is not otherwise taxable as taxable is nothing but arbitrary. There are some States which prescribes period of three months to cover in one F form and some States prescribe transaction of one month. Act should prevail over the Rules and the period is fixed in Rules and once the conditions laid down in the Act are fulfilled, Rule requires to be relaxed and that is how the Hon’ble High Court of Calcutta as declared the law and relieved the dealers of that State and hopefully, Commissioners/ Governments of the State will issue suitable instructions in the interest of justice.

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