Commercial Taxes Officer versus Metals and Alloys India Pvt. Limited

C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India PvtC R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvtrder dt:16/9/08

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S.B.CIVIL (S.T.)REVISION NO.538/2006

Commercial Taxes Officer, Circle B, Udaipur
vs.
M/s.Metals & Alloys India Pvt. Ltd.


S.B.CIVIL (S.T.)REVISION NO.286/2005

Commercial Taxes Officer, Circle B, Udaipur
vs.
M/s.Metals & Alloys India Pvt. Ltd.


S.B.CIVIL (S.T.)REVISION NO.532/2005

Commercial Taxes Officer, Circle B, Udaipur
vs.
M/s.Metals & Alloys India Pvt. Ltd.


DATE OF ORDER : 16/9/2008


HON'BLE DR.JUSTICE VINEET KOTHARI


Mr.Vineet Mathur standing counsel and
Mr.Rishabh Sancheti, for the petitioner-Revenue.
Mr.Tribhuvan Gupta, for the respondents-Assessee.

REPROTABLE

1. The Revenue has filed these revision petitions being aggrieved
of the orders of Tax Board dated 18/6/2003, whereby, the Tax Board

allowed the assessee's three appeals for assessment years 1990-91,

1991-92 and 1992-93 and set aside the order dated 16/2/2001 passed

by Deputy Commissioner (Appeals). The learned CTO had passed the

order on 14/3/1997 for these three assessment years invoking his

powers under Section 9 of the CST Act read with Section 12 of the


C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt order dt:16/9/08


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RST Act applicable to escaped turnover on the ground that inter-state
sales made by the assessee during these period sales were not
supported by `C' form required under Section 8(1) of the CST Act,
therefore, exemption under the Notification was not available to the
assessee and the exemption wrongly availed was liable to be
withdrawn and the assessee was liable to pay due CST applicable on
such inter-state sales made by him.

2. In the first appeal before the Deputy Commissioner (Appeals),
the Deputy Commissioner (Appeals) held in the order dated
16/2/2001 that the learned CTO could not invoke power under
Section 12 of the Act applicable for reassessment but on the basis of
judgment of Hon'ble Supreme Court in case of State of Rajasthan &
Anr. vs. Sarvotam Vegetable Products etc. (AIR 1996 SC 3178)
learned Assessing Authority could invoke jurisdiction to rectify the
mistake apparent on the face of record enshrined under Section 17 of
the Act and thus the learned Deputy Commissioner (Appeals) rejected
the appeal of assessee. The assessee took the matter further in second
appeal before the Tax Board which came to be allowed by the
impugned order dated 18/6/2003 and learned Tax Board held that
learned Deputy Commissioner (Appeals) could not convert the order


C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt order dt:16/9/08


3/7

passed under Section 12 of the Act on 14/3/97 as one under Section
17 of the Act while passing the order dated 16/2/2001 as by that time
the limitation under Section 17 had run out. The learned Tax Board
also found that since no notice in prescribed form No.33 for invoking
the power under Section 17 of the Act was issued by the CTO but
only a notice in the form 12-A applicable to invoke the power under
Section 12 of the Act was issued, therefore, assessment could not be
rectified by resort to Section 17 of the Act. Learned Tax Board,
therefore, allowed the assessee's appeal and set aside the order of
Deputy Commissioner (Appeals) dated 16/2/2001.

3. Being aggrieved by the said order of learned Tax Board, the
Revenue is in revision before this Court.
4. Mr.Rishabh Sancheti for Mr.Vineet Mathur appearing for the
Revenue submitted that lack of prescribed form or reference to wrong
provision cannot invalidate the assessment and, therefore, the power
to reassess or rectify the order to levy the tax in the absence of
compliance with the mandatory provision of furnishing `C' form was
not complied with by the assessee, the assessment to recover such
revenue cannot be invalidated merely on the ground that notice was
not issued in the prescribed form. He referred to the decision of

C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt order dt:16/9/08


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Supreme Court in case of Sarvotam Vegetable Products (supra) and
submitted that the controversy relating to requirement of furnishing
`C' form was put at rest while reversing the decision of Rajasthan
High Court in case of Shyam Oil Cake and by holding that such
concession could be availed only upon furnishing of `C' form.
Admittedly, in the present case, `C' form was not furnished by the
assessee despite grant of opportunity in the order dated 14/3/1997
which was passed following the aforesaid decision of Supreme Court
with reference to Section 12 of the Act. He also contended that resort
to Section 12 by the learned CTO was correct in the facts and
circumstances of the case. He, therefore, submitted that the impugned
assessment order was wrongly set aside by the learned Tax Board by
impugned order dated 18/6/2003 and the present revisions deserve to
be allowed.

5. On the side opposite, Mr. Tribhuvan Gupta, learned counsel
appearing for the respondent assessee urged that since no notice
under Section 17 was given to the assessee the learned Deputy
Commissioner (Appeals) had rightly held that assessment could not
be rectified under Section 17 of the Act. He submitted that learned
Tax Board has not erred in setting aside the order of Deputy

C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt order dt:16/9/08


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Commissioner (Appeals). He also submitted that since the assessee
availed the benefit under the Incentive Scheme of 1987, therefore, at
a later stage the Revenue Authority could not take back the said
benefit on the ground of non-furnishing of 'C' form as the said
authority had never any occasion to consider this aspect of the matter.
He, therefore, prayed for remand of case to the Assessing Authority.

6. I have heard learned counsels at length and given my
thoughtful consideration. Once it is not disputed and cannot be
possibly disputed that exemption could not be availed by the assessee
without furnishing `C' form in question in respect of inter-State sales,
reassessment for recovery of such exemption wrongly granted to the
assessee in the original assessment, cannot be questioned. The
enactment gives ample powers to the Revenue authority to reassess
such cases and it is nothing but escapement of turnover in true sense,
if exemption was allowed to the assessee without compliance of
mandatory requirement of law by furnishing of `C' form in
accordance with Section 8(1) of the CST Act.
7. In the opinion of this Court, learned Assessing Authority was
perfectly justified in invoking Section 12 of the Act within limitation
to reassess escaped turnover and withdrawing such exemption

C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt order dt:16/9/08


6/7

wrongly granted to the assessee in view of the binding decision of
Supreme Court in case of Sarvotam Vegetable Products (supra). Both
the learned Deputy Commissioner (Appeals) as well as Tax Board
have apparently fallen into error in holding that resort could be had in
such circumstance to provisions of Section 17 of the Act applicable
for rectification of apparent mistake on the face of record. Though by
some stretch of argument, such reassessment could also fall within
the scope of rectification of apparent mistake as there is no water
tight compartment between the two powers, yet the learned counsel
for Revenue rightly contends that mention of wrong provision even it
can be said to be so for withdrawing the exemption and recovering
such taxes from the assessee would not vitiate the assessment order.
A bare perusal of Section 19-A of the RST act would support this
contention besides catena of judgments on this point.

8. In view of this, this court is of the opinion that learned Tax
Board has wrongly set aside the order of Deputy Commissioner
(Appeals) dated 16/2/2001 as well as order of learned Assessing
Authority passed Section 12 of the Act dated 14/3/1997. The
contention of learned counsel for the respondent assessee that since
assessee was availaing benefit under the Incentive Scheme of 1987

C R.(S.T.).538/06-CTO, Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt. Ltd.-(2)CR (S.T.).
286/05-CTO,Circle B, Udaipur vs.M/s.Metals &Alloys India Pvt. Ltd.(3) C.R (S.T.).532/05-CTO,
Circle B, Udaipur vs.M/s.Metals & Alloys India Pvt order dt:16/9/08


7/7

and, therefore, no such additional tax could be imposed upon him is
also of no avail. The said Incentive Scheme operated in a different
field for granting exemption from taxes on the basis of eligible
investment made by the assessee during the operative period of the
Scheme. Such exemption could not override the exemption wrongly
granted to the assessee on account of non-compliance of the
mandatory provisions of Section 8(1) of the CST Act by not
furnishing `C' form as prescribed in law.

9. Consequently, this revision petition is allowed and the
impugned order of Tax Board dated 18/6/2003 is set aside. The
Revenue would be entitled to recover the due tax in pursuance of
reassessment order dated 14/3/1997. No costs.
(DR.VINEET KOTHARI), J.

item no.9 to 11
baweja/