The petitioner, a dealer in yarn at Guntur, placed orders for yarn from the Gokak Mills in Mysore State. When the consignments of yarn were in transit, he sold them to various purchasers by endorsing the railway receipts. The turnover in respect of these transactions came to Rs. 12,97,097. The petitioner claimed exemption from central sales tax under section 6(2) of the Central Sales Tax Act. The sales tax authorities did not allow the exemption on the ground that the petitioner did not file the declaration in form C as prescribed by rule 12(3)(ii) of the Central Sales Tax (Andhra Pradesh) Rules, though he filed form E-1. In this application for the issue of a writ, the petitioner claims that under section 6(2) of the Act, filing of form E-1 was enough to entitle the petitioner to claim the exemption and rule 12(3)(ii) which stipulates the filing of form C also is ultra vires as it is inconsistent with section 6(2) of the Act. Sri P. Rama Rao, learned counsel for the petitioner, relies on the decision of the Madras High Court in State of Madras v. Subbiah Pillai ([1967] 20 S.T.C. 263.), and of the Gujarat High Court in State of Gujarat v. Yakubbhai Hajihakumutdin ([1969] 23 S.T.C. 117.) in support of the petitioner's contention.

Section 6(1) of the Central Sales Tax Act authorises the levy of tax on sales effected in the course of inter-State trade but section 6(2) exempts from such levy second and subsequent sales in the course of such inter-State trade if the conditions prescribed therein are fulfilled. Section 6(2) is as follows :

"(2) Notwithstanding anything contained in sub-section (1), where a sale in the course of inter-State trade or commerce of goods of the description referred to in sub-section (3) of section 8 -

(a) has occasioned the movement of such goods from one State to another; or

(b) has been effected by a transfer of documents of title to such goods during their movement from one State to another;

any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subject to tax under this Act;

Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner a certificate duly filled and signed by the registered dealer from whom the goods were purchased, containing the prescribed particulars."

In order to claim the exemption granted by section 6(2) of the Act, (1) the sale must be a second or subsequent sale in the course of inter-State trade, (2) the sale must be effected by transfer of documents of title during the movement of the goods from one State to another, (3) the sale must be of goods of the description referred to in section 8(3), (4) the sale must be to a registered dealer, and (5) the seller also must have purchased the goods from a registered dealer. This last requirement is implicit in the proviso. The first and last requirements are met by proving the first or previous sale, and the proviso prescribes the mode of proof of such first or previous sale; the dealer claiming the exemption must produce a certificate in the prescribed manner from the registered dealer from whom the goods were purchased. Rule 12(4) of the Central Sales Tax (Registration and Turnover) Rules has prescribed that the certificate shall be in form E-1 or form E-2. Though the statute itself has prescribed the mode of proving the first and last requirements, the statute is silent about the mode of proof in regard to the other requirements. It does not mean that the rule-making authority is barred from making rules prescribing the mode of proof in regard to the other requirements. Section 13(3) of the Central Sales Tax Act enables the State Government to make rules, not inconsistent with the Act and the Rules made by the Central Government, to carry out the purposes of the Act. Prescription of mode of proof of the requirements stipul