Judgment

B. P. JEEVAN REDDY, J.:- Rates of tax on sales effected in the course of inter-State trade or Commerce are prescribed by Section 8 of the Central Sales Tax Act, 1956. The rates prescribed vary depending upon the person to whom the goods are sold as well as the nature of the goods. A reading of subsections (1) and (2) yields the following position:

(1) In the case of sale to government of any goods, the rate is 4 . [Section 8(1)(a)]

(2) On sale of goods of the description referred to in sub-section (3) to a registered dealer other than the government - @ 4 . [Section 8(1)(b)]

(3) In the case of sales not falling under sub-section (1) of Section 8, the tax on turnover shall be calculated at twice the rate applicable to the sale or purchase of such goods inside the appropriate State, if they are declared goods. [Section 8(2)(a)]

(4) In the case of sale of goods other than declared goods and not falling under subsection (I), tax shall be levied at the rate of 10 or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher. [Section 8(2)(b)]

2. Sub-section (2-A) provides for a lower rate of tax, or exemption from tax. as the case may be, in certain situations which it is not necessary to notice here. Sub-section (3) specifies the goods for the purpose of Section 8(l)(b), it is also not necessary to notice the nature of these goods. Sub-section (4), which is the main provision relevant for our purpose, reads thus :

"(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes, to the prescribed authority in the prescribed manner-

(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or

(b) If the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government :

Provided that the declaration referred to in clause (1) is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.

(The proviso to sub-section (4) was added by the Central Sales Tax (Amendment) Act (Act 61 of 1972) with effect from 1st April, 1973.)

3. Sub-section (4) thus prescribes a condition for applicability of sub-section (1) of Section 8. It says that if a dealer wishes to avail of the lower rate of tax prescribed by sub-section (1), he has to comply with the requirements prescribed by it. If the sale is to the government [Section 8(1)(a)] the selling dealer must produce before the prescribed authority (assessing authority) a certificate in the prescribed form duly filled and signed by a duly authorised officer of the government. The Rules made under the Act have prescribed the form of the certificate contemplated by the clause- it is called Form-D. Similarly, if the selling dealer says that he has sold the goods of the description referred to in sub-section (3) to a registered dealer [Section 8(1)(b)] lie shall have to produce a declaration duly filled and signed by a registered dealer to whom the goods are sold containing the prescribed particalars in the prescribed form obtained from the prescribed authority. The Rules made under the Act have prescribed the form in which such a declaration has to be issued by the purchasing dealer It is called Form-C. In case Form-D or Form-C is produced, the assessing authority would levy tax on inter-State sales @ 41 only; otherwise the sales will attract the higher rate of tax prescribed in sub-section (2).

4. Before we deal wit lithe proviso to subsection (4), it would be appropriate to refer to the Rule relevant in this behalf. It is Rule 12. It is a lengthy rule containing as many as ten sub-rules. Sub-rule (1) says that the certificate and the declaration referred to in claus