Maa Jagdamba Traders v. Commissioner, Value Added Tax

$~16 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 992/2019 MAA JAGDAMBA TRADERS ..... Petitioner Through:

Mr.Ravi Chandhok and Mr.Vasudev Lalwani, Advocates.

versus THE COMMISSIONER VALUE ADDED TAX ..... Respondent Through:

Mr.Satyakam, ASC for GNCTD.

CORAM:

JUSTICE S.MURALIDHAR JUSTICE TALWANT SINGH

O R D E R

% 09.07.2019 CM APPL. 4478-79/2019(EXEMPTION)

1. Allowed, subject to all just exceptions.

W.P.(C) 992/2019

2. The prayer in this writ petition is for quashing a notification dated 13th December 2018 issued by the Commissioner of Value Added Tax (CVAT) under Rule 5 (13) of the Central Sales Tax (Delhi) Rules, 2005 („CST Delhi Rules‟) to the effect that a „C‟ Form issued by M/s. Mahaveer Traders in favour of the present Petitioner is declared obsolete and invalid for all purposes, with effect from the date of issuance of such forms.

3. The said „C‟ Form was issued in favour of the present Petitioner on 22ndJanuary 2016 for the third quarter of 2015-16. The Petitioner is registered as a dealer under the Jammu and Kashmir Value Added Tax (JKVAT) and the Central Sale Tax, 1956 (CST Act) in the State of Jammu and Kashmir. The Petitioner made an inter-State sale of goods to Mahaveer W.P. (C) 992 of 2019 Page 1 of 3

Traders (the purchasing dealer) registered in Delhi under the CST Act. The sale was made against the „C‟ Form prescribed under the Central Sales Tax (Registration and Turnover) Rules 1957. The sale was made during 2015-16 in the sum of Rs. 2,39,08,882.00/-. Since both the dealer and the purchasing dealer were registered under the CST Act, the rate of tax was 2%. The dealer in Delhi i.e. Mahaveer Traders issued the above „C‟ Form in favour of the Petitioner, which was then presented by the Petitioner before the authority of Jammu and Kashmir in support of the payment of 2% tax. The return disclosing the said transaction and payment of tax of the said percentage was accepted by the authority in Jammu and Kashmir.

4. The short question that arises is whether there was any justification for the CVAT in New Delhi to retrospectively declare the „C‟ Form which had already been acted upon by the authority in Jammu and Kashmir as "obsolete". The attention of the Court is drawn to Rule 5 (13) of the CST Delhi Rules, which reads as under:

5(13) The Commissioner may, by notification, declare that Declaration Forms of a particular series, design or colour shall be deemed as obsolete and invalid with effect from such date as may be specified in the notification.

5. It is clear from the reading of the above Rule that the declaration of any Form being obsolete takes effect from such date as may be specified in a notification. The above sub-rule has to be read with Rule 5(14) which reads as under:

5(14)"When a notification, declaring Forms of a particular series, design or colour obsolete and invalid, is published under sub-rule (13), all registered dealers shall, on or before the date with effect from which the Forms are so declared obsolete and W.P. (C) 992 of 2019 Page 2 of 3

invalid, surrender to the Commissioner all unused Forms of that series, design or colour which may be in their possession and shall be issued in exchange for the Forms so surrendered, such new Forms as may be substituted for the Forms declared obsolete and invalid:

PROVIDED that new Forms shall not be issued to a dealer until he has accounted for the old Forms lying with him and returned the balance, if any, in his hand to the Commissioner.

6. A collective reading of both the sub-rules makes it clear that once the form that has been issued is utilized, the question of subsequently declaring such used forms as obsolete would not arise. Rule 5 (14) makes the requirement of surrender of the „unused forms‟ of the series design or colour that have been rendered obsolete clear and provides that only for such unused forms would new forms be issued. It is, therefore, plain that the above rules do not permit the CVAT to declare forms that have already been issued and acted upon as obsolete.

7. In that view of the matter, the impugned notification 13th December, 2018 issued by the CVAT is hereby quashed. The writ petition is accordingly allowed.

S.MURALIDHAR, J.

TALWANT SINGH, J.

JULY 09, 2019/mr W.P. (C) 992 of 2019 Page 3 of 3