R TEXTILES Vs. DEPUTY COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner is a dealer engaged in the manufacture of cotton yarn. The petitioner has reported a total and taxable turnover of Rs. 75,49,198 and Rs. 63,21,045 and the assessment order was passed on July 10, 2006. The inter-State sales of cotton yarn were assessed to tax at the concessional rate of two per cent and the petitioner had filed C forms for the above turnover. The petitioner was allowed exemption on the turnover of Rs. 12,28,143 as consignment sales of cotton yarn.

(2.) Subsequently, the place of business was inspected by the enforcement wing officials on December 7, 2006 and they recovered certain original and duplicate copies of the C forms. Verification of the C forms revealed that for a single transaction two different C forms were submitted by the petitioner. The form 10 extract obtained from the petitioner at the time of inspection by the officials revealed that the bill numbers and value relied on vary with each other. In this connection C form No. 7205342 dated September 14, 2005 and No. 5857085 dated Nil were scrutinised by the Department and it was found that the seal said to have been fixed by the officials were found to be irrelevant as it contained the words "Commercial Sales Tax Office" without mentioning the station of the assessing officer. Therefore, the assessing officer proceeded on the premise that the above two C forms filed in the office were bogus and need to be rejected as invalid.

(3.) In view of the prima facie finding that eight Nos. of C forms with a sale value of Rs. 25,59,174 were found to be bogus, the authority proposed to assess a higher rate of tax and consequently a show-cause notice dated April 18, 2007 was issued as to why penalty at the rate of 150 per cent on the above difference of tax under Section 9(2) of the CST Act read with Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 should not be levied. Objections were called for within 15 days from the date of receipt of this notice. The petitioner submitted a letter dated July 11, 2007 requesting the Commercial Tax Officer, Palladdam (1) to disclose the source of obtaining xerox copies of two C forms and from whom they were obtained and provide cross-examination of such parties ; (2) in the case of ascertained information by the Department that the petitioner had sold poly-mixed yarn and not cotton yarn, the assessee requested to disclose the source; (3) in respect of eight numbers of C forms found to be bogus, the petitioner requested the assessing officer to summon the parties at the other end and to cross-examine them under Section 54 of the TNGST Act, in order to establish the genuineness or otherwise of the C forms. Therefore, the petitioner has sought mandamus directing the respondent to invoke the powers under Section 54A of the TNGST Act, insofar as the turnover pertaining to the declaration form C proposed as bogus by the show-cause notice, was concerned.