Introduction
When there is inter-state branch transfer or interstate consignment transfer, the transferor branch has to obtain ‘F’ form, under CST Act, 1956, from the transferee branch. The procedural requirements about ‘F’ forms are mentioned in rule 12(5) of CST (Registration & Turnover Rules), 1957. The said rule is reproduced below for ready reference: “
Rule 12. (5) The declaration referred to in s/s. (1) of section 6-A shall be in Form ‘F’:
Provided that a single declaration 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;
Provided further that if the space provided in Form ‘F’ is not sufficient for making the entries, the particulars specified in Form ‘F’ may be given in separate annexures attached to that form so long as it is indicated in the form that the annexures form part thereof and every such annexure is also signed by the person signing the declaration in Form ‘F’;
Provided also that Form ‘F’ in force before the commencement of the Central Sales Tax (Registration and Turnover) (Second Amendment) Rules, 1973, may continue to be used upto 31st day of December, 1980 with suitable modifications.”
Controversy
As can be seen from the above rule, one single ‘F’ form can cover transfers effected during one calendar month. In other words, if there are transactions of more than one month in one ‘F’ form than the said ‘F’ form may not be effective for transactions exceeding the month.
In most of the judgments, given by Hon’ble Maharashtra Sales Tax Tribunal, the above position is accepted. Reference can be made to the judgment of Hon’ble Tribunal in case of Akay Cosmetics Pvt. Ltd. (A.No.33 of 2008 & SA No.255 of 2009, SA No.610 of 2009 dt. 3.5.2010). In this case, Hon’ble Tribunal has held that if the ‘F’ form is for transactions exceeding one month then it should be allowed only for one month. It is also observed that the dealer can take benefit of month for which there is highest amount. However, it cannot be effective for transactions exceeding one particular month.
In this respect, generally reference is made to the judgment of Hon’ble Supreme Court in case of India Agencies (Regd.) v. Additional Commissioner of Commercial Taxes, Bangalore (139 STC 329)(SC). In this case the issue was about admissibility of ‘C’ form. The Supreme Court has observed that the ‘C’ form should be submitted as per rules. Taking note of this judgment, it is generally interpreted that the declaration forms should be as per rules.
Recent judgment of Calcutta High Court
Recently, the Hon’ble Calcutta High Court had an occasion to deal with the said situation. The ‘F’ form was covering transactions for more than one month and hence, it was disallowed. The assessee, i.e. Cipla Ltd., filed a Writ Petition in the Hon’ble High Court. The Calcutta High Court has delivered judgment in case of Cipla Ltd. vs. Deputy Commissioner, Commercial Tax, Corporate Division & Others which is reported in (61 VST 445)(Cal). In this judgment, Hon’ble High Court has held as under:
“The order has apparently been passed ex parte. Three F forms have been disallowed on the purported ground that the three F forms bearing nos. 37514, 37518 and 37521 covered transactions exceeding a period of one month. 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 s/s. (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 constructed to vitiate a declaration form only on the ground that it covers transactions exceeding a period of over a month. The assessment has apparently been revised suo motu and ex parte on a misconception of rule 12(5) of the Rules. The impugned order is, thus, set aside and quashed.”
In light of the above, it can safely be inferred that even if the ‘F’ form is for transactions exceeding one month, it still will be valid for all the transactions. In this case, the judgment of Supreme Court in India Agencies is not cited or considered. However, since the High Court judgment is in relation to specific rule 12(5), it will be applicable, so far as ‘F’ forms are concerned.
Situation in other states
An issue can arise, as to whether the above judgment will be effective in other States also. In this respect, reference can be made to the judgment of Hon’ble Bombay High Court in case of Maniklal Chunnilal & Sons Ltd. vs. C.I.T. (24 ITR 375), wherein it is held that the judgment of any High Court under Central Act is binding in other States also except in a case where contrary judgment of the jurisdictional High Court of the respective state is available. The relevant portion of judgment is as under:
“A Special Bench of the Madras High Court has taken the view favourable to the Commissioner and contrary to the view suggested by Mr. Palkhiwala and in conformity with the uniform policy which we have laid down in income-tax matters, whatever our own view may be, we must accept the view taken by another High Court on the interpretation of the section of a statute which is an all-India statute.”
In light of the above, the judgment of the Calcutta High Court will be binding on other States also. It will be binding on Maharashtra also as there is no contrary judgment of the Hon‘ble Bombay High Court on the above issue.
Conclusion
It is a practical experience that getting declaration forms from the department is very difficult, more particularly, when substantial time has elapsed. It is also time consuming. Under the above circumstances, disallowance of claims on technical grounds cannot be justified. The judgment of the Calcutta High Court as such is very positive and practical and will give the much required relief to the dealers.
