Disallowance of Concessional Tax Rates despite Submission of Original C-Forms: Sales Tax Tribunal remits Matter to First Appellate Authority for Verification [Read Order]

The MaharashtraSales Tax Tribunal, Mumbai (Fifth Bench), has set aside an order of the Joint Commissioner of State Tax (Appeal-VII), Bandra, which had disallowed concessional tax benefits to M/s Matrix Distributors Pvt. Ltd. despite the assessee’s submission of original C-Forms. The Tribunal also remitted the matter to the First Appellate Authority (FAA) for re-verification of the forms and a fresh decision.

The case pertains to the assessment year 2008-09 under Section 9(2) of the Central SalesTax Act, 1956, read with Section 26 of the Maharashtra Value Added Tax Act, 2002. The Deputy Commissioner of Sales Tax had raised a demand of ₹1.09 crore (after rectification), leading the assessee to file an appeal before the FAA, which was rejected on 29 February 2024.

In the second appeal, the assessee, represented by Advocate Shri Moti B. Totalani, contended that the assessing officer wrongly taxed interstate sales at the full rate despite submission of all 16 original C-Forms and other supporting documents such as lorry receipts. It was argued that the FAA failed to consider the originals presented during assessment and appeal proceedings, leading to unjust disallowance of concessional tax.

The assessee maintained that the original forms had indeed been filed, but the acknowledgment was misplaced. It also produced duplicate forms and digital confirmation of certain declarations from the Tax Information Exchange System (TINXSYS). Relying on precedents including Manganese Ore (India) Ltd. v. CST, Madhya Pradesh, J.D. Orgochem Ltd. v. State of Maharashtra, and Hindustan Copper Ltd. v. State of Maharashtra, the appellant urged that duplicate forms could suffice if the originals were duly issued by competent authorities.

On the other hand, the Department’s representatives, Shri R.Y. Bade (Deputy Commissioner) and Shri A.S. Vishe (Assistant Commissioner), argued that no originals were produced before the FAA and that some duplicate forms bore overwriting or lacked overleaf details. They maintained that strict compliance under Section 8(4) of the CST Act was mandatory for concessional rates.

The Tribunal, comprising Dr. D.T. Alvares (Technical Member) and Shri D.K. Gudadhe (Judicial Member), observed that while submission of the duplicate part of Form C could be treated as valid in principle, certain factual discrepancies warranted verification. Referring to Manganese Ore (India) Ltd. (supra), the Bench noted that all parts of Form C-original, duplicate, and counterfoil are identical in terms, and filing of the duplicate part may amount to sufficient compliance if its genuineness is established.

Holding that verification of the forms was essential before granting relief, the Tribunal allowed the appeal, set aside the FAA’s order, and remitted the case for re-examination of the declarations and issuance of a fresh order. No order as to costs was made.

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