DUPLICATE PART OF C FORM, WHETHER VALID

Introduction

Under CST
Act, the vendor can sell the goods against C form to the buyer. The vendor is
depending upon buyer for getting the C form. As per Rules, there are three
identical parts in C form. The buyer retains counterpart with him. The two
parts marked as original and duplicate are given to vendor. The vendor is
required to produce the above two parts before his assessing authority for getting
the claim of sale against C form allowed.

India Agencies case

There the
controversy is about which part to be produced before the assessing authority.
The party, India Agencies, produced duplicate parts of C forms in its
assessment and they were disallowed on the ground that original parts are
required to be produced. The matter went to the Hon. Supreme Court which is
reported in case of India Agencies (139 STC 329)(SC). In this case,
Kerala (CST) Rules provided for production of original parts and on
non-production the claim was disallowed which was contested before the Hon.
Supreme Court. In above judgment the Hon. Supreme Court has rejected the claim
observing, amongst others, as under:- 

“25. The
learned Senior Counsel for the appellant submitted that there is no suggestion
anywhere that there is anything wrong with the genuineness of the transaction
or any doubts as to the possession by the purchasing dealer on a certificate
enabling the sellers to obtain the concessional rate of tax under section 8 of
the Act.

Under such
circumstances, the authorities should not have taken the strict view in
rejecting the claim of the concessional rate of tax. At first sight, the
argument of the learned counsel for the appellant appears to be genuine and
acceptable but considering the mandatory nature of the provisions of the Act
and Rules, this Court is called upon to decide the questions involved in this
case. The provisions being mandatory they should have been complied with. The
appellant made no attempt to comply with rule 12(3) till after his claim was
rejected by the assessing authority. Having made no attempt to comply with the
mandatory provisions, he disentitled himself from getting the concessional
rate. Even otherwise, in our view, it is a pure question of law as to the
proper interpretation of the provisions of section 8 of the Central Sales Tax
Act and the provisions of rule 12 of the Central Sales Tax (Registration and
Turnover) Rules, 1957 and rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules,
1957. In view of the decision of this Court in the case of Kedarnath Jute
Manufacturing Co.* [1965] 3 SCR 626 and of the decision in Delhi Automobiles
(P) Ltd.† (1997) 10 SCC 486, it is clear that these provisions have to be
strictly construed and that unless there is strict compliance with the
provisions of the statute, the assessee was not entitled to the concessional
rate of tax.”

Based on
above judgment there are a number of Tribunal judgments in Maharashtra where
the claims are disallowed for non-production of original parts.

Recent judgment of the Hon. Madras High
Court in case The State of Tamil Nadu vs. TVL India Rosin Industries [Tax Case
(Revision) No.66 of 2017 dt.13.12.2017]

The Hon.
Madras High Court had an occasion to deal with similar issue. The facts in this
case are that the original parts were misplaced and in appeal, the claim was
allowed based on duplicate parts. The Tribunal confirmed the order of the first
appellate authority. Therefore, the State Government has filed revision before
the Hon. Madras High Court. Following questions were referred for the opinion
of the High Court.

“9. Being
aggrieved by the dismissal of the appeal in S.T.A.No.86 of 2011, dated 25/10/2013,
on the file of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench),
Chennai, instant Tax Case Revision Petition is filed, on the following
substantial questions of law:-

1. Whether
on the facts and in the circumstances of the case, the Tribunal was right in
law in holding that duplicate Form F is sufficient for availing concessional
rate of tax?

2. Whether
on the facts and in the circumstances of the case, the Tribunal was right in
law in holding that though the decision reported in 83 STC 116 is related to C
Form, F Form also comes under CST Act?

3. Whether
on the facts and in the circumstances of the case, the Tribunal was right in
not considering the Rule 10 (2) of the CST Rule which prescribed, under which
circumstances duplicate forms can be accepted?

4. Whether
on the facts and in the circumstances of the case, the Tribunal was right in
not considering Rule 12 (2) and 12 (3) of the CST Rule which deals with the
procedure to be followed for obtaining duplicate forms in lieu of the original
declaration forms lost?

5. Whether
the Tribunal was right in ignoring the fact that the dealer while replying to
the pre-revision notice issued by the Assessing Officer, promised to file the
original form and requested extension of time for filing the same?” 

The Hon.
Madras High Court referred to the arguments of the State Government i.e.
revisionist and also referred to various provisions applicable on above subject
under CST Act and Local Act.

In
particular arguments on behalf of State Government are noted as under:-

“17.
Though Ms. Narmadha Sampath, learned Special Government Pleader contended that
one of the conditions required to be satisfied by the purchasing dealer is that
the Forms should have been lost and that the purchasing dealer, ought to have
submitted an indemnity bond, in Form G to the notified authority, from whom the
said Form was obtained, for such sum and only in the event of satisfying the
above said requirement, the Assessing Authority can decide, as to whether such
duplicate/certificate, can be accepted or not, and further submitted that in
the case on hand, when purchasing dealer had failed to discharge the statutory
obligation, refusal to accept the duplicate forms, cannot be said to be
erroneous, we are not inclined to accept the said contention, for the simple
reason that the Assistant Commissioner (CT) Harbour 2, Assessment Circle, has
not passed orders, with the above said reasons.”

The Hon.
Madras High Court further observed as under while rejecting the revision filed
by the State Government.

“20.
Having regard to the Forms (Original, duplicate or counter foil) and placing
reliance on the decision rendered in Manganese Ore (India) Ltd Vs. Commissioner
of Sales, Tax, Madhya Pradesh, reported in {1991 (83) STC 116}, the Appellate
Deputy Commissioner (CT)-I, has passed the orders, stating that, there is
nothing wrong in filing duplicate forms, for availing concessional rate. The
Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Chennai, has
referred to the Rules and accordingly, concurred with the views of the
appellate Authority.

21. Though
before the appellate Authority, contention has been made that submission of
original portion of Form, is mandatory for claiming concessional rate and that
there is every possibility of misuse of original Form, in some other
transaction, the said contention has been rejected. Form C (Rule 12 (1), is
issued by the State authority of the State. It also contains and name of the
person signing the declaration. Genuineness of the duplicate forms issued by
the authority of the other state to the purchaser-dealer is not disputed.
Revenue has not disputed that there was a inter-state sale and that a
certificate has been issued by the competent authority. Both the appellate
Deputy Commissioner (CT), Chennai, as well as the Tribunal had the opportunity
of perusing the duplicate forms. Assessee has relied on Manganese Ore Ltd’s
case and revenue has not placed any contra decision. On the facts and
circumstances of the instant case, the said judgment has persuasive value and
rightly applied.”

Thus, the
Hon. Madras High Court has taken a view, which will certainly give relief to
the litigants. It is nightmare to get the original of duplicate C forms from
the buyers. Under such circumstances, in genuine cases, the claim should remain
allowable against duplicate part of C form.

Although,
in this case the judgment of the Hon. Supreme Court in case of India Agencies
is not referred. But still the above judgment of the Hon. Madras High Court
based on provisions of CST Act will be helpful to the litigants. 

Conclusion

The above judgment is really very useful and it is a judgment
contemplating good relief in case of loss of original parts of C forms. Since
it is judgment under CST Act, it should remain applicable in all States unless
there is contrary judgment of any jurisdictional High Court. It should also
remain applicable in Maharashtra. A line of clarification and confirmation
about acceptance of above judgment by the concerned authority of Maharashtra
State will be much useful to avoid unnecessary litigations.