GVAT: C Form cannot be disallowed only on the basis of data available on tinxsys web site

Apurva N. Mehta, Advocate

In a recent decision dated 22.09.2015, rendered in the case of Jyoti CNC Automation Ltd. v/s the State of Gujarat, the Gujarat Value Added Tax Tribunal has held that C Form cannot be disallowed merely on the basis of data available on tinxsys [tax information exchange system] website without investigating the authenticity of the form.

The submissions made in this regard by the ld. counsel appearing for the appellant were recorded as under :

“ The first appellate authority has erred in rejecting C form No. 1314497 amounting to Rs. 24,27, 745 on the ground that there is a mismatch when verified with tinxsys website. He has submitted that the said website has no legal backing and is required to be set aside. The department has no authority to reject this form without the support of any factual evidences. Mr. Mehta submits that though it is stated in the appellate order that the appellant was asked to supply necessary information regarding this C form and regarding registration of the buyer, i.e. M/s Preet Machines Limited under the Central Sales Tax Act, l956, the fact is that the appellant was never called for to furnish any details and the authority had straightway disallowed this form in complete violation of principles of natural justice stating that the buyer’s registration record was not available on the tinxsys website. Mr. Mehta submits that this webs ite has no legal backing. No section or rule of the Central Sales Tax Act and Rules approve of the same. It only provides facilitative general information. Though it is managed by government run agencies, still it does not owe any responsibility regarding any content uploaded on the website. The webs ite itself starts with “Disclaimer” stating that no representation, endorsement or warranty is made that contents of the website are accurate or suitable for any particular purpose. He further submits that “conditions of use’’ put on the website clearly says that the contents included on the webs ite are solely for the personal use of website users. In other words, it cannot be used in any proceedings under the Act, be it assessment, appeal or revision. He states that in such circumstances and legal position, the authorities are bound to check up with the appropriate state or should give opportunity to the appellant to get it verified with the appropriate state. Had the authorities any doubt about the genuineness of the form, they should have carried out further investigation with the appropriate state. He further states that he has submitted a photo copy of this form with the pursis and the details shown on this copy clearly mentions the registration of the buying vendor under the local Act as well as CST Act. No cognizance of this information is taken by the appellate authority. He therefore submits that the form may be allowed in the assessment or alternatively, the appeal may be remanded to the lower authority for proper investigation in the matter by taking up the issue with the relevant State. ”

While accepting the arguments made on behalf of the appellant on the issue, the Tribunal held as under :

“ The fourth ground is regarding rejection of Form C No. 1314497 for Rs. 24,27,745 since it did not match with the record of tinxsys website. In our opinion, the appellate authority has erred in rejecting this form. Mr. Mehta, the learned Advocate has today submitted a pursis showing how the tinxsys website is not reliable for authenticity. The appellant has furnished a copy of the disputed C form. It contains details of registrations under local Act and CST Act as well as details about the issuing authority. We are of the view that the appellate authority should have, before rejecting the form, properly investigated the veracity of the form instead of relying only on the data available on tinxsys website. ”

Accordingly, the order of the authority was set aside and he was directed to carry out proper investigation with respect to C Form No. 1314497 as stated above.