G. SIVARAJAN, J. –

The question arising for consideration in these two writ petitions is regarding the validity of pre-assessment notices issued by the assessing authority proposing to reject the claim of exemption in respect of turnover of sale in transit effected by the petitioners on the ground that the petitioners failed to produce documentary evidence such as copies of endorsement of title and the consignee copy of lorry receipt or railway receipt. In other words, the question is as to whether, for the purpose of claiming exemption in respect of sale in transit the assessees are obliged under the provisions of the Central Sales Tax Act and the Rules made thereunder to produce the documents mentioned above in addition to E-I and C form declarations.

2. The petitioners in both the cases are dealers in paper and paper products. Most of the items are purchased from States outside Kerala against C forms for resale in Kerala. In some cases the goods so purchased from outside the State are sold in the course of transit. Such inter-State sales or second inter-State sales are entitled to exemption from sales tax by virtue of section 6(2) of the Central Sales Tax Act, 1956. Under the proviso to the said section any such claim for exemption has to be proved by producing a certificate in the prescribed form issued by the selling dealer from outside and a declaration obtained from the purchasing dealer in Kerala. As per rule 12(4) of the Central Sales Tax (Registration and Turnover) Rules, 1957 the certificate required to be obtained from the selling dealer for claiming exemption under section 6(2) is E-I or E-II form prescribed by the said rule. Similarly the declaration to be obtained from the purchasing dealer under clause (b)(i) of the proviso to section 6(2) is the same declaration provided under section 8(4)(a) of the Central Sales Tax Act which is form C. Therefore the scheme provided under section 6(2) of the Central Sales Tax Act for claiming exemption in respect of subsequent inter-State sales made by endorsement of title to goods which is the lorry receipt or the railway receipt is to obtain E-I form from the dealer who first sold the goods from outside State and to obtain C form from the ultimate dealer to whom the goods are sold by endorsement of the lorry receipt or railway receipt as the case may be.

2A. It is stated that the petitioners have been claiming exemption on subsequent inter-State sales for last nearly twenty years by producing E-I form obtained from the sellers from outside Kerala and C form obtained from the parties to whom the petitioner has sold the goods in Kerala by endorsement of lorry receipt. It is also stated that the procedure followed by the petitioner is to place purchase orders with the suppliers outside Kerala who will book the goods by public carriers and forward the negotiable consignee copy of the lorry receipt together with their invoice on the petitioner that on receipt of the lorry receipt the petitioner endorses the same to local purchaser in Kerala and deliver the lorry receipt along with the invoice after receiving payment, that the purchaser takes delivery of the goods from the carrier with the help of the lorry receipt endorsed by the petitioner in favour of the purchaser, that outside supplier issues the E-I forms and the local buyer from petitioner in Kerala issues C form to the petitioner, that the petitioner has been claiming exemption in all the past years on the basis of the E-I forms and corresponding C forms obtained by them and that the first respondent has also allowed exemption with the help of certificate and declaration so produced. It is also stated that the endorsed lorry receipt is surrendered by the ultimate buyer to the public carrier and a photocopy was not taken or retained by the petitioner at the time of endorsement and delivery, that the first respondent never requested for photo copies of lorry receipt for any other past years and that the assessment u