HC Orders Fresh VAT Assessment: ‘C’ & ‘F’ Forms Ignored; Directs Bank Account Release

Schindler India Pvt. Ltd. Vs State of Maharashtra (Bombay High Court)

The Bombay High Court recently issued an order in the case of Schindler India Pvt. Ltd. vs. State of Maharashtra. The petitioner sought several reliefs through this writ petition, primarily challenging an assessment order passed by the Assessing Officer under the Maharashtra Value Added Tax Act. The key contention of the petitioner was that the assessing officer had not considered the C-Forms and F-Forms submitted by the petitioner during the assessment. This article provides a detailed analysis of the case, focusing on the court’s order and its implications.

Detailed Analysis

Schindler India Pvt. Ltd. filed a writ petition under Article 226 of the Constitution of India, seeking various reliefs. The primary relief sought by the petitioner was to challenge the assessment order dated March 29, 2023, passed by the Assessing Officer under the Maharashtra Value Added Tax Act (MVAT Act). The petitioner contended that the assessing officer had not taken into consideration the C-Forms and F-Forms submitted by the petitioner during the assessment process.

The petitioner’s counsel drew the court’s attention to the assessment order and highlighted that there was no discussion or reference to the C-Forms and F-Forms in the assessment order. The petitioner argued that all relevant details and documents related to these forms had been presented to the assessing officer, and their non-consideration rendered the assessment order defective.

Furthermore, the petitioner pointed out that the Maharashtra Sales Tax Tribunal had issued an order on September 2, 2021, in VAT Appeal No. 12 of 2020, which directed the assessing officer to provide clear identification of the disallowed claim under sub-sections (1) and (2) of Section 6A of the Central Sales Tax (CST) Act. However, the impugned assessment order did not comply with this directive.

During the pendency of the writ petition, the Deputy Commissioner of State Tax had issued an order on August 18, 2023, attaching the petitioner’s current account with CITI Bank. This development was brought to the court’s attention, and the petitioner sought urgent ad-interim orders to stay the attachment.

The court considered the petitioner’s contentions and the documents presented, including letters and a certificate from a Chartered Accountant, which certified the total value of C-Forms issued by various states. The court observed that prima facie, it did not appear correct for the assessing officer to claim that C-Forms worth a substantial amount were not produced.

In light of the petitioner’s arguments and the lack of discussion in the assessment order regarding the C-Forms and F-Forms, the court concluded that the assessment order appeared to be passed without proper application of mind and without considering the materials submitted by the petitioner. The court ordered the assessment order to be quashed and set aside.

The court directed the Assessing Officer to hear the petitioner, consider all materials on record, and pass a fresh assessment order within six months from the date of presenting a copy of the court’s order.

Additionally, the court set aside the attachment of the petitioner’s account by the Deputy Commissioner of State Tax.

Conclusion

In the Schindler India Pvt. Ltd. case, the Bombay High Court quashed an assessment order passed under the Maharashtra Value Added Tax Act due to the assessing officer’s failure to consider C-Forms and F-Forms submitted by the petitioner. The court ordered a fresh assessment, emphasizing the importance of proper application of mind and consideration of materials submitted during assessments. This case highlights the significance of a reasoned and well-considered assessment order in tax matters.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1. This petition under Article 226 of the Constitution of India is filed praying for the following reliefs:-

“A. The Hon’ble Court be pleased to declare Section 26(6A)(a) of the Maharashtra Value Added Tax Act, 2002 as ultra vires the Central Sales Tax, 1956 and the Central Sales Tax Rules (Registration and Turnover Rules) of 1957 as well as the Constitution oflndia and consequently strike down the same;

B. The Hon’ble Court be pleased to issue a writ of certiorari and/ or any other appropriate writ, direction or order quashing and setting aside the Impugned Assessment Order dated 29 March 2023 being “Exhibit B” to the Petition;

C. That pending the hearing and final disposal of the Petition, the Hon’ble Court be pleased to stay the operation of the Impugned Assessment Order dated 29 March 2023 being “Exhibit B” to the Petition

D. Ad-interim reliefs in the nature of prayer clause “C” above;

E. That the Hon’ble Court be pleased to direct that any further proceedings pursuant to quashing and setting aside the Impugned Assessment Order dated 29 March 2023 being “Exhibit B” to the Petition, should not be carried on by the Respondent No.2 and the proceedings relating thereto be transferred to any other officer;

F. For costs of this petition; and

G. For such other order as the Hon’ble Court may deem fit to pass in light of the facts and circumstances of the case.”

2.  As fairly stated by Mr. Patkar, learned counsel for the petitioner, that prayer clause (a) of the petition is not being pressed. Thus, the adjudication of the petition would be confined to prayer clause (b) which is the only substantive prayer. It is stated that there is a typographical error in prayer clause (b) namely reference to “Exhibit-B” ought to have been to “Exhibit-A”

3. The challenge is to the assessment order dated 29 March 2023 passed by the Assessing Officer, whereby the petitioner has been assessed for tax demand under Maharashtra Value Added Tax. The primary grievance of the petitioner is that in passing the impugned assessment order, the assessing officer has not taken into consideration the C-Forms as also the F-Forms which were produced / submitted by the petitioners in the course of assessment. In this regard, the petitioner has referred to the correspondence and more particularly the letters dated 7 June 2019, 15 September 2019, 11 December 2019, 31 December 2019, 31 October 2022 and 22 November 2022, as also the certificate of the chartered Accountant certifying total value of C-Forms issued by various states to the tune of Rs.37,60,67,284/-

4. Mr. Patkar has drawn our attention to the operative part of the said order which is the only discussion as found in the assessment order which reads thus:-

“In said order Hon’blc MSTT ordered that, “The assessment order passed by assessing authority is set aside and the matter is remanded back to assessing authority to pass fresh assessment order.”

As per instruction given by Hon’ble MSTT, notice in form VI-B issued to dealer on 17/10/2022. In response the notice in form VI-B, Mr Sanjay Vora, CA attended time to time and produced books of accounts.

GTO of Sales is determined at Rs.8202704770/-, sales within the State is at Rs.4216030487/-. C Forms not produced at Rs.371181928/-, F Forms produced but not allowed at Rs. 1675659626/-, F forms not produced at Rs. l784549947/- Amount of CST payable is at Rs.479143541/-. All these figures are determined as per the original assessment order dated 31/03/2020. Legal merits of the assessment are considered in original assessment order dated 31/03/2020 and they are considered and allowed as per the original assessment order.

The clear identification of the disallowance of claim under sub-section (1) and sub-section (2) of section 6A of the CST Act with respect to points mentioned in paragraph 9.3 of the order of Hon’ble MSTT is given as below,

BALANCE TAXABLE 3842371724