Esjyapee Impex (P) Ltd. vs Commercial Tax Officer, Sowcarpet I, Assessment Circle, Chennai

T. S. Sivagnanam, J.—With the consent of the learned counsel appearing on either side, the writ petition itself is taken up for final disposal.

The prayer in the writ petition is for issuance of a writ of certiorarified mandamus to quash the assessment order passed by the respondent dated

March 31, 2006, in the light of the orders passed by the honourable Division Bench of this court in W. P. Nos. 8766 to 8768 of 2000 dated

September 25, 2001.

The matter arises under the Central Sales Tax Act, 1956 (hereinafter called as, ""the Act""). The petitioner is a dealer in spices and kirana. A pre-

assessment notice was issued by the respondent dated February 8, 2005 for the assessment year 2003-04 proposing to disallow the exemption in

case of branch transfer. On receipt of the pre-assessment notice, the petitioner submitted their reply on March 7, 2005, enclosing three original

form F in respect of branch transfer to Pondicherry. In respect of branch transfer to Mumbai, it was stated that form F declaration to the value of

Rs. 40,47,000 is yet to be received since the Mumbai branch was facing difficulty in obtaining forms from the sales tax authorities as the forms are

out of stock and likely to take another one month and requested the respondent to grant time up to April 15, 2005 for filing form F. After receipt

of the petitioner''s reply, the impugned assessment order has been passed, wherein the respondent confirmed the proposal to disallow the

exemption for non-production of form F in respect of the branch transfer to Mumbai branch. Aggrieved by such portion of the impugned order the

petitioner is before this court.

The learned senior counsel for the petitioner made elaborate submissions on facts and contended that after the pre-assessment notice was

issued, the petitioner had submitted their objections and requested time for production of form F from the Mumbai office in respect of the branch

transfer. However, such representation was not considered and no order was passed either accepting the request for extension of time or rejecting

such request, but the authority mechanically proceeded to confirm the proposal in the pre-assessment notice. The learned senior counsel placed

reliance on the order passed by the honourable Division Bench of this court in W. P. Nos. 8766 to 8768 of 2000, in support of his submissions.

Per contra, the learned Government Advocate (Taxes) by relying upon the counter-affidavit contended that since the petitioner did not file any

evidence in order to fulfil their condition for non-furnishing form F declaration in their Mumbai branch, the authority correctly proceeded and

passed the assessment order. Further the decision of the honourable Division Bench referred supra cannot be made applicable to the facts of this

case since the petitioner sought extension of time only till April 15, 2005, but the order of assessment was passed on March 31, 2006 and there

was sufficient time for production of form F declaration and therefore, the impugned order does not call for any interference.

I have considered the submissions made by the learned counsel appearing on either side and perused the materials available on record.

On receipt of the pre-assessment notice dated February 8, 2005, wherein the respondent stated that on verification of the debit notes,

commercial invoices, L. R. copies and bill of entry for the goods cleared at Mumbai Port and transferred to Mumbai branch and found that the

goods are transferred to branches at Mumbai and Pondicherry, but, form F declaration has not been produced and the assessments of sales tax at

Mumbai and Pondicherry were not produced, therefore, the respondent proposed to disallow the exemption and proposed to levy tax at 10.5 per

cent.

In reply to the pre-assessment notice, the petitioner furnished three numbers form F declaration, received from the Pondicherry branch. In

respect of the form F declaration from Mumbai branch, they stated that their branch office is facing difficulty to obtain such declaration from the

sales tax authority and therefore requested time till April 15, 2005.

According to the respondent, as stated in the counter-affidavit, the order was not passed immediately after April 15, 2005, but the assessment

order was passed only on March 31, 2006 and it was well open to the petitioner to produce the form F declaration. Therefore, there is no error in

the impugned order.

In this regard, it is relevant to refer to the decision of the honourable Division Bench in W. P. Nos. 8766 to 8768 of 2000. The Division Bench

took note of a clarification issued by the Commissioner stating that the failure on the part of the assessing officer to specify the further time allowed

to the assessee to file its reply after the document was furnished, must in the circumstances be held to have vitiated the order. Further, the Division

Bench held that if the assessing officer feels that the dealers had asked for time for production of records and they have already been given

reasonable opportunity and sufficient time there is no reason for granting further time, the order rejecting the request shall be passed and

communicated to the dealer then and there. If the assessing officer decides to comply with the request seeking extension of time, the date fixed for

further hearing or extension of time given shall be similarly intimated In the instant case, the petitioner sought for extension of time till April 15,

2005, by filing form F. This request was made in the reply dated March 7, 2005 to the pre-assessment notice dated February 8, 2005. The

respondent has accepted the receipt of the reply, but has not passed either granting time or rejecting the request.

In such circumstances, by applying the law laid down by the honourable Division Bench which was passed after taking note of the clarification

issued by the respondent-Department, it has to be held that the impugned order to that extent, disallowing the exemption for an amount of Rs.

40,47,000 has to be held to be vitiated. The Division Bench has held that when a request for extension is either granted or rejected, intimation

thereon should be given to the assessee then and there. Therefore, the explanation sought to be given by the respondent in the counter-affidavit that

the order of assessment was passed much after the period is no ground to justify their action. Thus, the order of the Division Bench fully supports

the case of the petitioner and they are entitled to succeed.

The learned senior counsel for the petitioner submits that form F declaration are available with the petitioner and they are ready to produce the

same.

In my view, no rule or regulation has been brought to the notice of this court stipulating any outer time-limit for filing such form F declaration.

Therefore denial of exemption cannot be solely due to the default committed by the petitioner, which according to them was beyond their control.

In any event, if the petitioner possesses the required statutory document which would justify their claim for exemption, the respondent-authority

cannot refuse to look into those documents, unless he has been statutorily prohibited from doing so. When technicalities and equity are pitted

against each other, equity alone shall triumph. That apart, the issue involved in the present case is a money claim and therefore, the petitioner is

entitled to effective and reasonable opportunity.

In that view of the matter, the writ petition is allowed and the impugned order in so far as it disallows the exemption for non-production of form

F declaration to the tune of Rs. 40,47,000 is set aside and liberty is granted to the petitioner to produce the form F declaration stated to be in their

possession and the respondent shall complete the assessment after providing sufficient opportunity to the petitioner. No costs. Consequently,

connected miscellaneous petition is closed.