Maa Jagdamba Traders v. The Commissioner Value Added Tax

$~12 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13340/2018 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

1. The prayer in this writ petition is for quashing a notification dated 18th June, 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 to Gentex International in favour of the present petitioner is declared obsolete and invalid for all purposes with effect from the date of issuance of such forms.

2. The said „C‟ Form was issued in favour of the present petitioner on 22nd April, 2017 and it was valid for the first quarter of 2016-17. 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 Gentex (the W.P. (C) 13340 of 2018 Page 1 of 4

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 the first quarter of 2016-17 in the sum of Rs. 1,31,77,023/-. 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. Gentex International 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.

3. The short question that arises is that 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 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.

4. 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 ha 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 W.P. (C) 13340 of 2018 Page 2 of 4

with effect from which the Forms are so declared obsolete and 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.

5. 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.

6. In addition the Court‟s attention is drawn to a verification letter issued by the Assistant Vat Tax Officer to the petitioner to the following effect: "M/s Maa Jagdamba Traders TIN:01961031250 Near Kalith Nagar Upper Gumat (Jammu) Jammu & Kashmir Ref: Verification of declaration forms W.P. (C) 13340 of 2018 Page 3 of 4

This is with reference your letter dated 29.09.2017 for verification of C form No. 12150162030417 for Rs. 13,17,77,023/- issued by Jaintex International (TIN:07357100820) for central purchases made during first quarter of 201617. The same has also been enquired by Assessing Authority Circle 'C', Jammu.

In this regard, it is informed that the above mentioned form is verifiable on the website of Trade & Taxes Department, Delhi on the link form verification.

AVATO Ward-72"

7. In that view of the matter, the impugned notification 18th June, 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) 13340 of 2018 Page 4 of 4