Regarding rejection of form-c by the sales tax authorities
This query is : Resolved
03 August 2015
Our organisation is selling to the different customers in In India.We had received an order from BSNL in 2010-11 for supply of goods and installation work.
AS per the customer's order, we had to deliver the goods at the various consignees in all over india.
In F.Y. 2011-12 , Month of March 2012 , goods were dispatched to 10 different consignees. For 5 Consignees , sales were accounted in March 2012 and for balance 5 Consignees sales was booked in April 2012 as the goods were not receievd by the consignee upto 31.03.2012.All the goods were taxable at the rate of 2 % against Form-C.
BSNL Issued a single Form -C for all the 10 consignees, as all the excise invoices were of march 2012.
This C Form was rejected by the sale tax authorities on the ground that sale of the same were accounted in diffrent quarters of two financial years.
Your valuable opinions are needed on this rejected FORM-C.
AS per the customer's order, we had to deliver the goods at the various consignees in all over india.
In F.Y. 2011-12 , Month of March 2012 , goods were dispatched to 10 different consignees. For 5 Consignees , sales were accounted in March 2012 and for balance 5 Consignees sales was booked in April 2012 as the goods were not receievd by the consignee upto 31.03.2012.All the goods were taxable at the rate of 2 % against Form-C.
BSNL Issued a single Form -C for all the 10 consignees, as all the excise invoices were of march 2012.
This C Form was rejected by the sale tax authorities on the ground that sale of the same were accounted in diffrent quarters of two financial years.
Your valuable opinions are needed on this rejected FORM-C.
09 February 2016
Please answer the abovementioned query as it is related to an urgent matter
20 July 2025
This is a common but nuanced issue in CST (Central Sales Tax) compliance. Here's a professional assessment of the rejection and how to approach it:
📝 Issue Recap:
BSNL placed a single consolidated order.
Goods dispatched to 10 consignees across India in March 2012.
You booked sales for 5 consignees in March 2012 and 5 in April 2012, as delivery happened post 31st March.
BSNL issued one Form-C covering all 10 transactions based on invoice dates (March 2012).
Sales Tax Authorities rejected the Form-C for 5 consignments booked in April 2012, arguing they fall into the next financial year (2012–13).
⚖️ Legal Position:
Under Central Sales Tax Act, 1956, key provisions to note:
Form-C Validity:
Form-C is issued quarter-wise or annually, but it must match the period of actual inter-state sales.
The form must align with the accounting period in which sales are recorded, not just invoice date.
Time of Sale (per CST & Accounting):
As per Section 3 of CST Act, a sale is considered completed when movement of goods commences pursuant to a contract of sale.
However, for tax and accounting, the date of receipt by buyer or the accounting date is generally followed for tax reporting.
🚫 Why Form-C Was Rejected:
The single C Form covers sales across two financial years (F.Y. 2011–12 and 2012–13).
Your books show sales in two different periods, but the Form-C reflects only one quarter/year (Mar 2012).
Mismatch between the CST return and Form-C period leads to procedural rejection.
✅ Recommended Actions:
1. Request Revised Form-C from BSNL:
Ask BSNL to issue two separate Form-Cs:
One for March 2012 (F.Y. 2011–12)
One for April 2012 (F.Y. 2012–13)
Even if the invoices are dated March, if sales are accounted in April, Form-C should match the accounted sales period.
2. Submit Explanation to Sales Tax Officer (STO):
Provide a detailed reconciliation of invoices, dispatch details, and accounting entries.
Include:
Copy of consignment notes
Proof of dispatch/delivery dates
Explanation of why part of sales were booked in April
Cite CST case laws, if needed, to demonstrate bona fide nature.
3. Check with BSNL if Form-C can be reissued for correct quarters:
BSNL (as a government entity) may cooperate if you give them clarity and request formally.
⚠️ Practical Note:
Tax authorities are correct procedurally, as sales were reported in different financial years. Form-C must match accordingly.
However, this is rectifiable with support from BSNL.
📚 Case References (if needed in representation):
[CST vs. Elgi Equipments Ltd. (Madras HC)] — Highlighted timing of movement vs. accounting.
CST Circulars/Notifications — Some states provide administrative relief if documentary proof justifies good faith.
📝 Issue Recap:
BSNL placed a single consolidated order.
Goods dispatched to 10 consignees across India in March 2012.
You booked sales for 5 consignees in March 2012 and 5 in April 2012, as delivery happened post 31st March.
BSNL issued one Form-C covering all 10 transactions based on invoice dates (March 2012).
Sales Tax Authorities rejected the Form-C for 5 consignments booked in April 2012, arguing they fall into the next financial year (2012–13).
⚖️ Legal Position:
Under Central Sales Tax Act, 1956, key provisions to note:
Form-C Validity:
Form-C is issued quarter-wise or annually, but it must match the period of actual inter-state sales.
The form must align with the accounting period in which sales are recorded, not just invoice date.
Time of Sale (per CST & Accounting):
As per Section 3 of CST Act, a sale is considered completed when movement of goods commences pursuant to a contract of sale.
However, for tax and accounting, the date of receipt by buyer or the accounting date is generally followed for tax reporting.
🚫 Why Form-C Was Rejected:
The single C Form covers sales across two financial years (F.Y. 2011–12 and 2012–13).
Your books show sales in two different periods, but the Form-C reflects only one quarter/year (Mar 2012).
Mismatch between the CST return and Form-C period leads to procedural rejection.
✅ Recommended Actions:
1. Request Revised Form-C from BSNL:
Ask BSNL to issue two separate Form-Cs:
One for March 2012 (F.Y. 2011–12)
One for April 2012 (F.Y. 2012–13)
Even if the invoices are dated March, if sales are accounted in April, Form-C should match the accounted sales period.
2. Submit Explanation to Sales Tax Officer (STO):
Provide a detailed reconciliation of invoices, dispatch details, and accounting entries.
Include:
Copy of consignment notes
Proof of dispatch/delivery dates
Explanation of why part of sales were booked in April
Cite CST case laws, if needed, to demonstrate bona fide nature.
3. Check with BSNL if Form-C can be reissued for correct quarters:
BSNL (as a government entity) may cooperate if you give them clarity and request formally.
⚠️ Practical Note:
Tax authorities are correct procedurally, as sales were reported in different financial years. Form-C must match accordingly.
However, this is rectifiable with support from BSNL.
📚 Case References (if needed in representation):
[CST vs. Elgi Equipments Ltd. (Madras HC)] — Highlighted timing of movement vs. accounting.
CST Circulars/Notifications — Some states provide administrative relief if documentary proof justifies good faith.
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