ravi venkataraman (commercial executive) 24 November 2010

Sales tax liability

Dear Sir,

I am working with an SME unit as an Commercial Executive.

Since we are the manufacturers , we are selling the goods on Concessional rate of S.Tax(i.e. CST) as well as purchasing the goods in concessional rate of S.Tax.

Some of our customers to whom we have sold the goods have not furnished the C form since 2006-07.

As our assessment is over we have been asked to pay the difference with interest & penalty.

Our question is

1) whether we can collect the C forms at a later stage and filing for refund claim with S.Tax authorities?

2) In case customer cannot able to furnish the C form, can we have to collect only the difference or with penalty?

3) For the goods bought for our factory, we are about to provide C form for the A/C year 2006-2007. Recently we have approached the S.Tax authorities who have replied that issuance of C form for the year 2006-07 to 2008-09 has been stopped. Now we are in the brink of paying S.Tax with penalties.

Can the forum suggest any remedical measures

Regards.

Ravi.V.

raviatreya14@gmail.com

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2 Replies

H.M.Patnaik (Proprietor) 21 December 2010

As per the limited facts stated, it is understood that ypour company sources it's Raw materials from other state and the Finished products are sold in course of Inter- State - sales i.e. attracting CST . Besides, for 2006-07 due to failure for submission of C forms at assessment stage, tax & penalty has been demanded .

Now your questions are answered as under:

1) Now , You have to prefer an appeal under the CST law along with stay petition . So, that you get Full/partial relief till finalisation of 1st Appeal. In the meanwhile, try to collect the wanting C forms and submit the same during course of hearing of 1st Appeal to get maximum relief from the liability created on the Dealer- Appellant.

2) In case Customer is unable to provide you the wanting C form , Your Company is free to compensate the liability by raising a Debit Note of amount equal to the tax, interest & penalty suffered on it's count.

3) Actually, Your Company should have applied for C forms against purchases in the same Quarter in which such purchases were made .However, Your Company must have shown these inter- state purchases in the Periodic Returns filed from time to time and obtained Depttl. permits to facilitate movements of Goods from one State to another called "Way Bill" under Orissa Act . Hence, the Deptt. is aware of such Inter- State Purchases. therefore, You may file a Revision Petition before the Commissioner of Commercial Taxes,stating the details of such purchases and attaching a copy of rejection of your company's application for issue of C forms by the Issuing Authority and praying for passing of necessary instruction to the Issuing Authority for issue of requisite C forms. in case , you failin the Revision case , the State High Court is to be approached for getting the desired relief.

M.V.GIRI (ADVOCATE & TAX CONSULTANT) 22 December 2010

I agree with Mr. Patnaik. Another noted point is why the department is not issuing "C' forms to the company. Is there any due from the co or otherwise ie not declaring interstate purchase. If the company was declared the interstate purchase in their monthly return, the department cannot reject your application and reject for the issue of 'C' form. for non receipt of 'C' forms from the customers invariably you have to prefer the appeal.