Punjab VAT Tribunal has held in an important case namely Mahavir Vanaspati Company Vs State of Punjab revision No 13 of 2010 (2011) 17 STM (JS) 278 decided on December 23, 2010 that starting of revisional proceedings on the ground that F forms were not available on the files were bad in law and petitioner could not be held liable to pay CST on the ground that the consignment sales were to be treated as inter-state sales for want of F forms or due to registration of the Consignees firms cancelled or those firms not filing regular returns in those States or paying tax.
Facts of the case: In this case the assessment was framed by the Assessing Authority by accepting consignment sales of Rs 16,72,52,211/- against valid F forms. In the revisional proceedings started by AETC u/s 9(2) of CST Act read with 21(1) of PGST Act, 1948, the notice for revision was issued on the ground that the F forms in support of the consignment sales claimed by the dealer were not on file and so called consignment sales were not genuine.
After issuance of notice in detailed enquiry it was found by department that either the registration of those firms were cancelled or no F forms were issued by the concerned Assessing Authorities to those firms for further issuing to the parties
The Revisional Authority then held that, in fact, these were inter-state sales, hence CST @ 10% and penalty u/s 10(7) of PGST Act was levied.
Held: The assessing authority had accepted the F forms and had permitted consignment sales of Rs 16,72,52,211/- against valid F Forms. The revisional proceedings had been started on the ground that F forms were not available on the file. However these had been submitted by the petitioner dealer and were retained on record. If at some stage, these were misplaced by the department people, then the petitioner could not be called to be at fault. Then enquiries were started by the revisional authorities as to whether the firms to whom goods had been sent on consignment basis existed and were issuing F forms.
The dealer had been sending goods on consignment basis and was receiving regular accounts and payments by way of Bank and had received the F forms also. Now if on enquiry having made by the revisional/departmental authority at a later stage, it was found that those firms were not existing or did not make sale on behalf of the dealer petitioner or did not issue F forms, the petitioner could not be held to said to be at fault and liable since petitioner would be not in a position to verify the genuineness of those firms in other states and especially when the accounts statements were being received and submitted. Those firms were duly registered and had obtained F forms from their State Government and issued the same to the petitioner.
In facts and circumstances of the case we are of the view that starting of revisional proceedings on the ground that F forms were not available on the files were bad in law and petitioner could not be liable to pay CST on the ground that the consignment sales were to be treated as inter-state sales for want of F forms or due to registration of the consignees firms cancelled or those firms not filing regular returns in those state or paying tax.
Comments: From above case two things become clear if the dealer at the time of assessment has submitted statutory forms and later on these forms are misplaced by department officials then starting of revisional proceedings on the ground of non-availability of such forms on file is bad in law as there is no fault of the dealer in it.
Secondly if the statutory forms such as F form is being received by the dealer from dealers in other States under a bonafide belief that such forms are genuine, then such dealer cannot be held liable to pay CST on the ground that the registration of the issuer of such forms has been cancelled or he is not filing regular returns in those states.
Facts of the case: In this case the assessment was framed by the Assessing Authority by accepting consignment sales of Rs 16,72,52,211/- against valid F forms. In the revisional proceedings started by AETC u/s 9(2) of CST Act read with 21(1) of PGST Act, 1948, the notice for revision was issued on the ground that the F forms in support of the consignment sales claimed by the dealer were not on file and so called consignment sales were not genuine.
After issuance of notice in detailed enquiry it was found by department that either the registration of those firms were cancelled or no F forms were issued by the concerned Assessing Authorities to those firms for further issuing to the parties
The Revisional Authority then held that, in fact, these were inter-state sales, hence CST @ 10% and penalty u/s 10(7) of PGST Act was levied.
Held: The assessing authority had accepted the F forms and had permitted consignment sales of Rs 16,72,52,211/- against valid F Forms. The revisional proceedings had been started on the ground that F forms were not available on the file. However these had been submitted by the petitioner dealer and were retained on record. If at some stage, these were misplaced by the department people, then the petitioner could not be called to be at fault. Then enquiries were started by the revisional authorities as to whether the firms to whom goods had been sent on consignment basis existed and were issuing F forms.
The dealer had been sending goods on consignment basis and was receiving regular accounts and payments by way of Bank and had received the F forms also. Now if on enquiry having made by the revisional/departmental authority at a later stage, it was found that those firms were not existing or did not make sale on behalf of the dealer petitioner or did not issue F forms, the petitioner could not be held to said to be at fault and liable since petitioner would be not in a position to verify the genuineness of those firms in other states and especially when the accounts statements were being received and submitted. Those firms were duly registered and had obtained F forms from their State Government and issued the same to the petitioner.
In facts and circumstances of the case we are of the view that starting of revisional proceedings on the ground that F forms were not available on the files were bad in law and petitioner could not be liable to pay CST on the ground that the consignment sales were to be treated as inter-state sales for want of F forms or due to registration of the consignees firms cancelled or those firms not filing regular returns in those state or paying tax.
Comments: From above case two things become clear if the dealer at the time of assessment has submitted statutory forms and later on these forms are misplaced by department officials then starting of revisional proceedings on the ground of non-availability of such forms on file is bad in law as there is no fault of the dealer in it.
Secondly if the statutory forms such as F form is being received by the dealer from dealers in other States under a bonafide belief that such forms are genuine, then such dealer cannot be held liable to pay CST on the ground that the registration of the issuer of such forms has been cancelled or he is not filing regular returns in those states.
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