M/S.General Traders vs. State Of Orissa

Held

The Court answered both questions in the negative, in favour of the petitioner. Regarding Question A, the Court implicitly held that the production of 'H' Forms and export documents, when sufficient, should have led to the allowance of the exemption claim, and a remand was not justified. The Court found that the First Appellate Authority had granted relief regarding penalty for non-submission of statutory forms, and the Tribunal erred by remanding the penalty issue to the Assessing Authority for reconsideration, especially in the absence of an appeal or cross-objection by the revenue. Citing Srinivas Traders, the Court held that the Tribunal ought not to travel beyond the dispute raised by the petitioner and should not have disallowed relief granted by the First Appellate Authority. The Court also referred to a Circular dated April 20, 2015, which advised against enforcing penalty under Rule 12(3)(g) for non-filing of declaration forms in bona fide transactions, in the absence of a substantive provision. Therefore, the Tribunal was not legally correct in remanding the penalty issue. The Court set aside the Tribunal's order and the corresponding orders of the First Appellate Authority and Assessing Authority to the extent they were adverse to the petitioner.

Facts

The petitioner, M/s. General Traders, Berhampur, challenged an order of the Odisha Sales Tax Tribunal dated May 18, 2017. This order was in appeal against an order dated April 30, 2015, by the Additional Commissioner of Sales Tax. The dispute arose from an audit assessment framed under Rule 12(3) of the Central Sales Tax (Odisha) Rules, 1957, by the Joint Commissioner of Sales Tax for tax periods from June 1, 2006, to March 31, 2010. The Assessing Authority raised a demand of Rs. 29,91,752, comprising tax and penalty, by rejecting the petitioner's claim for exemption under Section 5(3) of the CST Act on inter-State sales in the course of export. The petitioner claimed exemption as a penultimate seller, providing 'H' Forms and export documents. The Assessing Authority disallowed the claim for Rs. 30,28,84,89.50, treating it as inter-State sale, for failure to produce agreements between Indian exporters and foreign buyers and for a specific transaction of niger seeds.

Key Issues

1. Whether, in light of the production of 'H' Forms and export documents including Bill of Lading for claims under Section 5(3) and 5(4) of the CST Act, it was lawful for the First Appellate Authority to remand the matter for fresh assessment (Question A). The petitioner argued that the production of these documents should have led to the allowance of the claim, not a remand. The revenue's stance on this specific point is not explicitly recorded. 2. Whether, in the absence of an appeal or cross-objection by the State and in view of the Commissioner of Commercial Taxes' Circular dated April 20, 2015, the Tribunal was justified in ordering reconsideration of the imposition of penalty under Section 12(3)(g) of the CST(O) Rules, 1957 (Question B). The petitioner contended that the Tribunal erred by allowing the State to seek reconsideration of penalty when the State had not appealed. The revenue's arguments regarding the Tribunal's order are not explicitly recorded.