Sam. R. Textiles vs Deputy Commercial Tax Officer

S. Manikumar, J.—The petitioner is a dealer engaged in the manufacture of cotton yarn. The petitioner has reported a total and taxable turnover of Rs. 75,49,198 and Rs. 63,21,045 and the assessment order was passed on July 10, 2006. The inter-State sales of cotton yarn were assessed to tax at the concessional rate of two per cent and the petitioner had filed C forms for the above turnover. The petitioner was allowed exemption on the turnover of Rs. 12,28,143 as consignment sales of cotton yarn.

Subsequently, the place of business was inspected by the enforcement wing officials on December 7, 2006 and they recovered certain original and duplicate copies of the C forms. Verification of the C forms revealed that for a single transaction two different C forms were submitted by the petitioner. The form 10 extract obtained from the petitioner at the time of inspection by the officials revealed that the bill numbers and value relied on vary with each other. In this connection C form No. 7205342 dated September 14, 2005 and No. 5857085 dated Nil were scrutinised by the Department and it was found that the seal said to have been fixed by the officials were found to be irrelevant as it contained the words "Commercial Sales Tax Office" without mentioning the station of the assessing officer. Therefore, the assessing officer proceeded on the premise that the above two C forms filed in the office were bogus and need to be rejected as invalid.

In view of the prima facie finding that eight Nos. of C forms with a sale value of Rs. 25,59,174 were found to be bogus, the authority proposed to assess a higher rate of tax and consequently a show-cause notice dated April 18, 2007 was issued as to why penalty at the rate of 150 per cent on the above difference of tax u/s 9(2) of the CST Act read with Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 should not be levied. Objections were called for within 15 days from the date of receipt of this notice. The petitioner submitted a letter dated July 11, 2007 requesting the Commercial Tax Officer, Palladdam (1) to disclose the source of obtaining xerox copies of two C forms and from whom they were obtained and provide cross-examination of such parties ; (2) in the case of ascertained information by the Department that the petitioner had sold poly-mixed yarn and not cotton yarn, the assessee requested to disclose the source; (3) in respect of eight numbers of C forms found to be bogus, the petitioner requested the assessing officer to summon the parties at the other end and to cross-examine them u/s 54 of the TNGST Act, in order to establish the genuineness or otherwise of the C forms. Therefore, the petitioner has sought mandamus directing the respondent to invoke the powers u/s 54A of the TNGST Act, insofar as the turnover pertaining to the declaration form C proposed as bogus by the show-cause notice, was concerned.

Learned Counsel for the petitioner submitted that the assessing officer or the appellate authority is empowered to get further information which would be useful or relevant for the purpose of deciding as to whether eight C forms referred to in the show-cause notice are bogus or not. She has further submitted that the respondent has no jurisdiction to unilaterally reject the statutory C forms which are not under the control of the respondent and when the petitioner has proved the purchase, by producing gate pass of lorry receipts and invoices.

Considering the prayer in the writ petition, Mr. R. Madhadevan, Additional Government Pleader, was put on notice and heard. He submitted that the xerox copies of the C forms were received from the petitioner for examination and later on, the petitioner themselves came forward and submitted some other C forms.

Verification of the C forms revealed that the seal said to have been affixed by the officials was found to be irrelevant, as it contained the words "Commercial Sales Tax Office" only, without mentioning the station of the assessing officer and it was proposed to disallow the exemption sought for by the petitioner. He further submitted that the C forms were submitted only by the petitioner and not recovered from any third party or from other dealer. Therefore, the issue of verifying the source for obtaining the xerox copy of C forms does not arise and hence the prayer in the writ petition is not maintainable. Heard the counsel appearing for the parties and perused the records.

Section 54A of the TNGST Act enables, "any assessing authority or appellate or revising authority under this Act or any officer of the Commercial Taxes Department not lower in rank than an Assistant Commercial Tax Officer may, by writing, require any person or authority to furnish such information, particulars or records available with that person or authority as will be useful or relevant to any proceeding under this Act". If the authority requires information from any person or authority, for the purpose of adjudication, he can make a requisition in writing to that person or authority to provide such information or particulars, as the case may be. In the present case, C forms were actually produced by the petitioner and they are not recovered or obtained from any other person. Therefore, when the petitioner themselves are the source of the documents there is no need to summon any third party so as to enable the petitioner to cross-examine them.

In view of the above, the request of the petitioner to invoke Section 54A of the TNGST Act insofar as the C forms mentioned in the show-cause notice dated April 18, 2007, is concerned, it is not maintainable. Hence, this writ petition is dismissed. No costs. Consequently, connected miscellaneous petition is closed.