Rule 4 of Central Sales Tax (Delhi ) Rules, 2005 reads as hereunder:
Reconciliation Return (1) In addition to the returns required under rule 3, every dealer shall also furnish to the Commissioner, a Reconciliation Return for a year in Form 9 relating to receipt of declarations / certificates (hereinafter referred to as ‘statutory forms’) within a period of six months from the end of the year to which it relates. The return shall be filed electronically:
PROVIDED that the return can be filed for a quarter or more than one quarter of the year, any time during the year but not later than the limitation period specified in sub-rule(1): PROVIDED ALSO that provisions of sub-rule (5) of rule 5, clause (a) of sub rule (5) of rule 7, sub-rule (2) of rule 9, rule 6A and rule 6B shall not apply in so far as periodicity of filing of reconciliation return and furnishing of declaration(s) / certificate(s) is concerned.”
(2) The statutory forms received in original, in lieu of concessional sale or stock transfer shall be retained by the dealer with him. The Commissioner may direct the dealer to furnish such forms as and when required by him during a period of seven years from the end of the year to which the forms relate.
(3) The return in Form 9, may be revised by the end of the financial year next to which it relates: PROVIDED that the Commissioner may extend the period of revision by three months after end of the limitation period of revision. PROVIDED FURTHER that notwithstanding anything contained in these rules or the DVAT Rules, 2005, no further extension in the time period for such revision shall be permissible. Explanation - The word ‘year’ and ‘quarter’ for the purposes of these rules have the same meaning as defined in Delhi Value added Tax Act, 2004 and rules framed there under.
Through this amended rule 4 the government of Delhi introduced, the time limit for furnishing the statutory forms and also dispensed with the furnishing of statutory forms in order to claim deductions. This provision requires in depth examination. In order to examine the validity we have to look into the relevant provisions of the Central Sales Tax Act, 1956 and Central Sales Tax (Registration & Turnover) Rules, 1957 which are reproduced below:
Section 8(4) of the Central Sales Tax Act, 1956 which earlier read as:
“(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner-
(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or
(b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government: PROVIDED that the declaration referred to in clause (a) is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.
The said section was substituted by Taxation Laws (Amendment) Act, 2007 (16 of 2007), w.e.f. 1.4.2007
(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority: PROVIDED that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.
The relevant rule relating to the furnishing of statutory forms is rule 12(7) Central Sales Tax (Registration & Turnover) Rules, 1957 which is reproduced here below:
(7) The declaration in Form C or Form F or the certificate in Form E-I or Form E-II shall be furnished to the prescribed authority within three months after the end of the period to which the declaration or the certificate relates: PROVIDED that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate within the aforesaid time, the authority may allow such declaration or certificate to be furnished within such further time as that authority may permit.
The Apex Court had an occasion to examine Rule 6 of the Central Sales Tax (Kerala) Rules, 1957 which is in para materia to rule 4 of Central Sales Tax (Delhi ) Rules, 2005
While interpreting the provisions of rule 6 of Central Sales Tax (Kerala ) Rules, 1957 Hon’ble Supreme Court of India in the case of S.T.O. Vs. K. I. Abraham [1967 AIR 1823(S.C.) held that :
"Rule 6. (1) Every dealer registered under section 7 of the Act and every dealer liable to pay under the Act shall submit a return of all his transaction including those in the course of export of the goods out of the territory of India in Form 11 together with connected declaration forms so as to reach the assessing authority on or before the 20th of each month showing the turnover for the preceding month and the amount or amounts collected by way of tax together with proof for the payment of tax due thereon under the Act. Provided that in cases of delayed receipt of declaration forms, the dealer may submit the declaration forms at any time before the assessment is made : Provided further that the delay in submitting the declaration forms shall not exceed three months from the date of sale in question: Provided also that all declaration forms pending submission by dealers on 2-5-1960 shall be submitted not later than 16-2-1961."
It was contended on behalf of the appellants that the assessee had not filed the declarations in form ’C’ before February 16, 1961 according to the third proviso to Rule 6(1) and in view of the breach of this Rule the assessee was not entitled to take advantage of the lower rate of assessment under s. 8(1) of the Act. The opposite viewpoint was put forward on behalf of the assessee and it was argued that the third proviso to Rule 6 (1) was ultra vires of s. 8 (4) read with s. 13 (4) (e) of the Act.
The decision of the question at In other words, the section does not authorise the rule making authority to prescribe a time limit within which the declaration is to be filed by the registered dealer. The view that we have taken is supported by the language of s. 13 (4) (g) of the Act which states that the State Government may make rules for "the time within which, the manner in which and the authorities to whom any change in the ownership of any business or in the name, place or nature of any business carried on by any dealer shall be furnished." This makes it clear that the Legislature was conscious of the fact that the expression "in the manner" would denote only the mode in which an act was to be done, and if any time-limit was to be prescribed for the doing of the act, specific words such as "the time within which" were also necessary to be-put in the statute. In Stroud’s Judicial Dictionary it is said that, the words "manner and form" refer only "to the mode in which the thing is to be done, and do not introduce anything from the Act referred to as to the thing which is to be done or the time for doing it".issue therefore depends on the construction of the phrase "in the prescribed manner" in s. 8 (4) read with s. 13 of the Act. In our opinion, the phrase "in the prescribed manner" occurring in s. 8(4) of the Act only confers power on the rule-making authority to prescribe a rule stating what particulars are to be mentioned in the prescribed form, the nature and value of the goods sold, the parties to whom they are sold, and to which authority the form is to be furnished. But the phrase "in the prescribed manner" in s. 8(4) does not take in the time element.
The amendment deleting the reference to sales made to Government in sub-section (4) of section 8 of the Central Sales Tax Act, 1956 vide Taxation Laws (Amendment) Act, 2007 does not make any change in the basic provision for allowing deductions against statutory forms.
The substitution of words “within three months after the end of the period to which the declaration or the certificate relates” in place of words “ upto the time of the assessment by the first assessing authority” also does not make any substantial change in the scenario as the judgment of the Hon’ble Supreme Court in the above case is issued keeping the words “in the prescribed manner” and Proviso to the sub-rule (7) of the Rule 12 of the Central Sales Tax (Registration & Turnover) Rules, 1957 in consideration.
While section 8(4) of Central Sales Tax Act, 1956 and rule 12(7) of Central Sales Tax (Registration & Turnover) Rules, 1957 does not prescribed the rigid time frame for submission of the statutory forms, rule 4 of Central Sales Tax (Delhi ) Rules, 2005 provides the rigid time limit by ignoring the proviso in the section 8(4) of the Act and rule 12(7) of the rules. Rule 4 of the Central Sales Tax (Delhi ) Rules, 2005 which is in pari materia with rule 6 of the Central Sales Tax (Karnatka ) Rules, 1957, the above cited judgement which held the Central Sales Tax (Karnataka ) Rules, 1957 as ultra vires, holds good and applicable to the said rule 4 also.
The rule 4 of the Central Sales Tax (Delhi ) Rules, 2005 is also bad in view of the recent judgement of the Hon’ble High Court of Delhi Court in the case of Ingram Micro India Pvt. Ltd.,
The High Court’s observations in reference to Rule 12(7) are reproduced here below:
“10. The difficulties in obtaining of C-Forms by the selling dealer from the purchasing dealer is acknowledged in the Central Sales Tax (Registration & Turnover) Rules, 1957 (‘CST Rules, 1957’). Rule 12 (7) of the CST Rules, 1957 requires the selling dealer to furnish the declaration in Form-C to the prescribed authority “within three months after the end of the period to which the declaration or the certificate relates”. However, the proviso to Rule 12 (7) of the CST Rules, 1957 states that if the prescribed authority is satisfied that the selling dealer was “prevented by sufficient cause for furnishing such declaration or certificate within the aforesaid time” the authority may allow further time to the selling dealer to furnish such declaration “as that authority may permit”. A collective reading of the aforementioned rules reflects the intention of not specifying a rigid and inflexible time limit for furnishing a C-Form. In any event, as far as a purchasing dealer making a request for issuance of C-Forms under the CST Delhi Rules, there appears to be no such inflexible condition as to the time within which the request should be made.”
Section 13(3) of the Central Sales Tax Act, 1956 restricts the State Government’s power to make rules which are inconsistent with the provisions of the Central Act or rules and as in view of the findings of the Hon’ble High Court cited above the collective reading of the Act and Rules reflects the intention of not specifying a rigid and inflexible time limit for furnishing the statutory forms. Though not specifically said but rule 4 of the Central Sales Tax (Delhi ) Rules, 2005 which imposes the rigid and inflexible time limit is held to be ultra vires.
Rule 4 is ultra vires on other grounds also. Section 8(4) requires a dealer to furnish the statutory forms in order to claim the deductions. Rule 4 dispenses with the furnishing of statutory forms at the stage of allowing the claim of deductions. In Criminal Apeal No. 1798 of 2009 Kanwar Singh Saini Vs. High Court of Delhi the Hon’ble Supreme Court observed that :
When a statute gives a right and provides a forum for adjudication of rights, remedy has to be sought only under the provisions of that Act. When an Act creates a right or obligation and enforces the performance thereof in a specified manner, “that performance cannot be enforced in any other manner”. Thus for enforcement of a right/obligation under a statute, the only remedy available to the person aggrieved is to get adjudication of rights under the said Act. (See: Doe d. Rochester (BP) v. Bridges, 109 ER 1001; Barraclough v. Brown, 1897 AC 615; The Premier Automobiles Ltd. v. K.S.Wadke & Ors., AIR 1975 SC 2238; and Sushil Kumar Mehta v. Gobind Ram Bohra (Dead) thr. L.Rs., (1990) 1 SCC 193).
The State Government might appear to have dispensed with furnishing of statutory forms apparently with a noble idea of dispensing with the appearance of the dealers before the authorities but has tempered with the manner specified under the Act thus the act of the State Government is ultra vires the provisions of the Central Sales Tax Act, 1956 and Central Sales Tax (Registration & Turnover) Rules, 1957.
The statutory forms are required to be furnished to the prescribed authority and it is the prerogative of the prescribed authority to allow further time for furnishing forms which the authority seems sufficient, and the Commissioner Vat is not the prescribed authority in terms the rule 2(cc) of the Central Sales Tax (Registration & Turnover) Rules, 1957 as he does not discharge functions required under section 13(4)(e) of Central Sales Tax Act, 1956 so the authority given to Commissioner Vat is inconsistent with the said provision and hence ultra vires.
The above views are according to my understanding of the subject and only advisory in nature.
The author can also be reached at delvatp@gmail.com
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