2022-VIL-772-CAL

VAT High Court Cases

Central Sales Tax Act, 1956 – Section 8 - Respondent purchased HSD during the disputed period, 01.07.2017 to October 2018 from Indian Oil (IOCL) and used and claimed concessional rate of tax under Section 8 of the CST Act - The benefit of concessional rate of tax was denied as assessment of IOCL for the relevant year was completed – Entitlement of purchasing dealer to claim refund of the excess Central Sales Tax collected by IOCL and remitted to the State of West Bengal on account of production of Form “C” declarations - Locus Standi of the writ petitioner/purchasing dealer to maintain the writ petition for refund of excess CST collected by IOCL and remitted to the Government of West Bengal – HELD - The writ petitioner / purchasing dealer has locus standi to maintain the claim for refund of the excess tax collected directly to them and the writ petition is maintainable | Whether filing of Form “C” declaration by the selling dealers is mandatory? Can Form “C” declaration be filed belatedly – HELD - To be entitled to concessional rate of tax filing of Form “C” declaration is mandatory. However, the time limit prescribed for filing such declarations is directory and not mandatory and in the case on hand the assessing officer having accepted the Form “C” declarations and considered the same, it is deemed that the assessing officer of IOCL was satisfied that there was sufficient cause which prevented the dealer from filing Form “C” declaration within the time stipulated under the Act and the rules framed thereunder | Whether the impugned assessment order is liable to be set aside due to the rejection of the Form “C” declaration by the assessing authority – HELD - Having held that the rejection of the Form “C” declarations was erroneous, unsustainable and illegal the assessment order to the said extent is set aside | Whether the purchasing dealer is entitled to concessional rate of tax, who have admittedly fulfilled the conditions under Section 8 of the CST Act – HELD - The purchasing dealer is entitled to the concession rate of tax as they have fulfilled the conditions in Section 8 of the Central Sales Tax Act, 1956 and the Form “C” declarations having been verified and found to be in order by the concerned authority of the State of West Bengal | Whether the purchasing dealers are entitled to claim refund of tax directly from the state or should they claim the refund from the selling dealers (IOCL) – HELD - the purchasing dealers are entitled to claim refund of tax directly from the State of West Bengal and they are not required to make the claim through the selling dealer, IOCL | Whether the refund can be denied to the purchasing dealers by the State of West Bengal disregarding the fact that excess tax was paid under compelling extraordinary circumstances and non-issuances of Form C declaration – HELD - Refund cannot be denied to the purchasing dealers by the State of West Bengal disregarding the fact that excess tax was paid under compelling circumstances namely non-issuance of form “C” declarations | Whether the purchasing dealers are eligible to claim refund directly from the State in view of the fact that excess tax has been deposited by IOCL with the State of West Bengal – HELD - the purchasing dealers can claim refund directly from the appellants/State of West Bengal having borne the burden of tax which have been collected from the purchasing dealers and deposited by IOCL with the Exchequer of the State of West Bengal | Whether the State Government is legally justified in refusing refund of excess tax when it is admittedly being allowing the concessional rate to the petitioner-assessee before and after the disputed period (01.04.2017 to 31.03.2018) – HELD - The State of West Bengal/appellants are unjustified in refusing to refund the excess tax to purchasing dealers as it had been allowing concessional rate to the before and after the disputed period | Whether the non-refund of excess tax is contrary to the instruction of the Government of India dated November 01, 2018 – HELD - The circular issued by the Union of India dated 01.11.2018 is binding on the appellants/State of West Bengal as they being the agent of the Central Government for levy and collection of Central Sales Tax and non-refunding of the excess tax collected is contrary to the instruction dated 01.11.2018 - writ petition is entitled to refund of the excess tax collected and deposited with the State Exchequer – Revenue appeal is dismissed - Form-C declarations filed beyond the prescribed time limit - When Form “C” declarations are filed beyond the time prescribed the prescribed authority is empowered to accept such forms on being satisfied that the dealer was prevented by “sufficient cause” for not filing the forms within the time prescribed. In the instant case, the appellants/state have not raised any such contention that the dealer has not shown “sufficient cause” for having not been able to produce the form “C” declaration along with their returns or within the time prescribed. Thus, it goes without saying that the appellants are aware of the legal position as time limit prescribed for filing the form “C’ declaration was directory as the statute empowered the prescribed authority to accept the declarations even after the expiry of the time prescribed. The underlying principle behind this interpretation is Article 265 of the Constitution of India - Requirement of filing Revised Return - The stand taken by the State that Form “C” declarations submitted cannot be considered as IOCL has not filed revised return or that the invoices have not been amended or credit notes have not been issued is a stand which is legally unsustainable. If the contention raised by the appellant is to be accepted, it will fall foul of Article 265 of the Constitution as the State can levy or collect tax except by authority of law and the rate of tax to be recovered must also be carried out strictly in accordance with law - the reason for not accepting the Form “C” declaration was wholly untenable. While on this issue we need to consider as to whether the appellants could have not suited to the claim for concessional rate of tax on the ground that revised return have not been filed by IOCL. Section 30 (2) of the WBST Act prescribed the period for filing the return and Sub-section (6) of Section 30 prescribed the time limit for filing the revised return. Admittedly on the date on which the Form “C” declaration was filed before the assessing authority of IOCL, the time stipulated for filing revised return under Section 30(6) had expired. If that be so can IOCL be compelled to do an act which is legally impermissible and impossible to perform - Binding nature of Circular issued by the Central Government dated 01.11.2018 – HELD - the circular issued by the Central Government dated 01.11.2018 directs the State of West Bengal to follow the decision in Capro Power. The State Government being as an agent of the Central government for levy and collection of Central Sales Tax is bound by the circular. The State of West Bengal did not question the circular issued by the Central Government dated 01.11.2018 in such factual scenario it is specious plea raised by the State of West Bengal before this Court stating that the circular would not bind the State Government and at best the circular is only understanding of the decision of the Court. The State of West Bengal cannot be heard to take such a stand because the decision which was directed to be followed in the circular was upheld by the Hon’ble Supreme Court and has become a binding legal precedent. The delegatee cannot over step or supersede the delegator and this being an elementary principle, the State of West Bengal cannot and could not wriggled out of their obligation in following the decision and continuing to accept the Form “C” declaration submitted by the selling dealers. After the legal issue had settled down and the state of Jharkhand issued Form “C” declar

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