VAT Assessment Made Without Considering C-Forms & F-Forms: Bombay High Court Directs AO for Afresh Assessment and Release of Bank A/c Attachment [Read Order]

The High Court of Bombay has directed the Assessing Officer (AO) to conduct a fresh assessment in a case where the Value Added Tax (VAT) assessment was allegedly made without considering crucial C-Forms and F-Forms submitted by the assessee. The court also ordered the release of the attachment of the assessee’s bank account, which was initiated by the Deputy Commissioner of State Tax.

The case involved Schindler India Pvt. Ltd., challenging an assessment order passed by the Assessing Officer under the Maharashtra Value Added Tax Act, 2002.

The petitioner assessee, represented by Mr. Ishaan V. Patkar and Mr. Durgesh G. Desai, contended that the AO had not taken into account the C-Forms and F-Forms submitted during the assessment process which are essential for determining tax liabilities and credits under the VAT system.

The C Form is used for inter-state transactions, allowing registered businesses to purchase goods at a reduced tax rate, provided they are reselling those goods. On the other hand, the F Form is employed for branch transfers or stock transfers between different states, ensuring proper VAT compliance and tracking of goods movement. Both forms play a crucial role in facilitating tax compliance and minimizing tax liabilities for businesses operating across state borders.

The petitioner argued that it had consistently communicated its compliance and submission of these forms through various letters. Additionally, a certificate from a Chartered Accountant verified that C-Forms issued by various states amounted to Rs.37,60,67,284.

The respondent revenue, represented by Mr. Himanshu Takke, reiterated the findings of the order.

The bench found that the assessment order did not contain any discussion or reasoning regarding the C-Forms and F-Forms submitted by the petitioner and thus observed that there was a significant oversight by the AO in the assessment process.

The bench concluded that the assessment order appeared to be lacking in the application of mind and disregard for the materials presented by the petitioner.

The bench also noted that the Maharashtra Sales Tax Tribunal, in a previous order, had directed the AO to provide a clear identification of the disallowance of claims under specific sections of the Central Sales Tax Act. However, the assessment order failed to comply with this directive.

The division bench comprising Justices G. S. Kulkarni and Jitendra Jain directed the AO to conduct a fresh assessment, considering all the materials on record, and hear the petitioner. This fresh assessment must be completed within six months from the date a copy of the court’s order is presented before the AO.

The bench addressed the attachment of the petitioner’s bank account, which had been ordered by the Deputy Commissioner of State Tax. Given the petitioner’s submission of C-Forms and F-Forms and the apparent non-application of mind in the assessment order, the court found the attachment unjustified. Consequently, the court ordered the immediate release of the attached bank account.

In result, the bench set aside the assessment order and directed the AO to conduct a fresh assessment, emphasising the need for tax authorities to consider all relevant documents and materials submitted by taxpayers during the assessment process.

To Read the full text of the Order CLICK HERE

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