S.P. Bailing Press vs Deputy Commissioner (CT) Visakhapatnam and Others

Ramesh Ranganathan, J.—The action of the first respondent, in passing revision proceedings dated 19.11.2012, for the period 2005-06 (CST), under Section 32(2) of the Andhra Pradesh Value Added Tax Act, 2005 r/w Section 9(2) of the Central Sales Tax Act, 1956 (for brevity, ''the Act''), is questioned in this Writ Petition as being arbitrary and illegal. The petitioner is a proprietary concern carrying on business in Iron and Steel. It is a registered dealer on the rolls of the second respondent, both under the Andhra Pradesh Value Added Tax Act, 2005 and the Act for the years 2005-06 and 2006-07. The third respondent completed assessment under the Act, vide proceedings dated 23.01.2009, levying tax at 4% on a part of the turnover and 10% on the other part not covered by ''C'' forms. The first respondent exercised revisional powers under Section 32(2) of the Andhra Pradesh Value Added Tax Act, 2005 r/w Rule 50 of the Andhra Pradesh Value Added Tax Rules, 2005 and Rule 14-A(8) & (9) of the Central Sales Tax Rules, 1957 proposing to revise the assessment for the years 2005-06 and 2006-07 on the ground that the petitioner had not produced the original ''C'' forms before the third respondent. During the pendency of revision proceedings before the first respondent, the second respondent placed the ''C'' forms, for the years 2006-07, before the first respondent resulting in the revision proceedings being dropped for the said year. However, on the ground that the original ''C'' forms were not produced for the year 2005-06, the revisional authority revised the assessment, and subjected the petitioner to tax at the higher rate of 8% on the ground that those goods were not covered by ''C'' forms. Sri Sk. Jeelani Basha, learned counsel for the petitioner, would submit that the petitioner had submitted the original ''C'' forms to the second respondent for both the years 2005-06 and 2006-07; and had obtained acknowledgment. The second respondent would, however, contend that, while receipt of the ''C'' forms was acknowledged, the acknowledgment does not state that the original ''C'' forms were received; while the original ''C'' forms, for the year 2006-07, was received, the records do not disclose their having received the original ''C'' forms for the year 2005-06. The case of the third respondent, in his counter-affidavit, is that he had granted exemption on the turnover covered by photostat copies of the ''C'' declaration forms, after comparing the same with the duplicate copy of the original ''C'' declaration forms produced by the petitioner.

Rule 12(2) of the Central Sales Tax (R & T) Rules, 1957 stipulates that, where a blank or a duly completed form of declaration is lost while it is in the custody of the purchasing dealer or in transit, the purchasing dealer shall furnish, in respect of every ''C'' form so lost, an indemnity bond, in respect of the declaration form, to the notified authority. Such an indemnity bond is required to be furnished by the selling dealer to the notified authority of his State if a duly completed form of declaration received by him is lost, whether such loss occurs while it is in his custody or while it is in transit. It is only in cases where the ''C'' form is lost either in the custody of the purchasing or selling dealer, or in transit, are they required to furnish an indemnity bond.

Sri Sk. Jeelani Basha, learned counsel for the petitioner, would contend that, as the petitioner had submitted the original ''C'' forms for the years 2005-06, the petitioner cannot be held responsible for the ''C'' forms being misplaced in the office of the second respondent; and cannot, therefore, be required to submit an indemnity bond. In his counter-affidavit, the first respondent states that the third respondent had passed the assessment order on the basis of photostat copies of the ''C'' forms. If that be so, the third respondent has acted contrary to Rule 12(2) of the Central Sales Tax (R & T) Rules, 1957 in passing an assessment order without even obtaining a duplicate copy of the original ''C'' form and an indemnity bond from the assessee.

As the revisional show cause notice was issued for both the years 2005-06 and 2006-07, on the ground that the assessment order was made on the basis of photostat copies of the ''C'' forms and not the original; and, as the original ''C'' form for the year 2006-07 was forwarded by the second respondent to the first respondent during the pendency of revision proceedings, it is difficult to hold that the petitioner had misplaced the ''C'' forms for the year 2005-06 alone. His contention that, it was misplaced in the office of the second respondent, cannot be readily brushed aside.

As it does appear that the third respondent has passed an assessment order without having the original ''C'' form before him, and as the requirements of Rule 12(2) of the Central Sales Tax (R & T) Rules, 1957 were not complied with, we consider it appropriate to permit the petitioner to produce the original of the duplicate ''C'' forms before the first respondent. On such production, the first respondent may cross-verify the genuineness of the ''C'' forms with the issuing authority and, if found to be genuine, pass an order afresh in accordance with law.

The third respondent admits having passed the assessment order on the basis of the duplicate copy of the original ''C'' form. It is not even his case that he had obtained an indemnity bond from the petitioner as is required under Rule 12(2) of the Central Sales Tax (R & T) Rules, 1957. While we were initially inclined to direct the Government to initiate disciplinary proceedings against the third respondent, we refrain from passing such an order, as Sri P. Balaji Varma, learned Special Standing Counsel for Commercial Taxes, submits that disciplinary proceedings has already been initiated against the third respondent, and action would be taken against him in accordance with law. The impugned order of the revisional authority is set aside. The third respondent shall call upon the petitioner to submit the duplicate copy of the original ''C'' form for the year 2005-06 before him and, thereafter, pass an order afresh in accordance with law. The Writ Petition is, accordingly, disposed of. The miscellaneous petitions pending, if any, shall also stand disposed of. There shall be no order as to costs.