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 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withdrawn and the assessee was liable to pay due CST applicable on such inter-state sales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 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
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 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 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 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/-