The benefit of the concessional tax rate under section 8(1) of the Central Sales Tax Act is conditional upon the assessee producing and furnishing the prescribed declaration C Form, in the prescribed manner.

Headnote:
CENTRAL SALES TAX ACT - SECTION 8(1), 8(2), 8(3), 8(4) - RULES 5, 10, 13 - INTERPRETATION - C FORMS - DEFECTIVE C FORMS - TAXATION AT CONCESSIONAL RATE - CONDITIONS - STRICT COMPLIANCE WITH RULES - NECESSITY - PURPOSE OF SALE - NON-STRIKING OUT OF COLUMNS IN C FORM - EFFECT.
Fact of the Case:

The petitioner, a firm of dealers in pump sets machinery, was assessed by the Joint Commercial Tax Officer under the Central Sales Tax Act for the year 1959-60. Of the total turnover, a certain amount was held liable to tax at the rate of 1% and the remaining amount at the rate of 7%. The petitioner appealed before the Appellate Assistant Commissioner of Commercial Taxes, claiming that a portion of the turnover should be taxed at the rate of 1% instead of 7%. The appellate authority dismissed the appeal. The petitioner then filed a further appeal before the Sales Tax Appellate Tribunal, which granted relief on a certain turnover, reducing the tax rate from 7% to 1%. The State filed a revision petition challenging the Tribunal's order.
Finding of the Court:

The court held that the benefit of the concessional tax rate under section 8(1) of the Act is conditional upon the assessee producing and furnishing the prescribed declaration C Form, in the prescribed manner. The court further held that the non-submission of C Form will have the consequence of the assessee not obtaining the benefit of section 8(1) but cannot in any way vitiate the return or render it incomplete or defective. The court also held that the C Forms produced by the petitioner in regard to certain transactions were not defective merely because no column relating to the "purposes" was struck out but all the columns were left intact. The court interpreted the C Forms as indicating that the non-resident buyer intended the purchase for all the purposes set out in the form.
Issues: 1. Whether the assessee is entitled to the benefit of the concessional tax rate under section 8(1) of the Central Sales Tax Act without producing the prescribed C Form before the assessing authority? 2. Whether the C Forms produced by the petitioner in regard to certain transactions were defective due to the non-striking out of columns relating to the "purposes"?
Ratio Decidendi: 1. The court held that the benefit of the concessional tax rate under section 8(1) of the Act is conditional upon the assessee producing and furnishing the prescribed declaration C Form, in the prescribed manner. The court relied on the express and mandatory language of section 8(4) of the Act, which states that the provisions of sub-section (1) shall not apply to any sale unless the dealer selling the goods furnishes the prescribed declaration in the prescribed manner. 2. The court held that the C Forms produced by the petitioner in regard to certain transactions were not defective merely because no column relating to the "purposes" was struck out but all the columns were left intact. The court interpreted the C Forms as indicating that the non-resident buyer intended the purchase for all the purposes set out in the form.
Final Decision: The court partly allowed the revision petition. The decision of the Tribunal was confirmed in regard to certain transactions and set aside in regard to other transactions. There was no order as to costs.

Judgment :-

JAGADISAN, J.

The petitioner is a firm of dealers carrying on business in "pump sets" machinery at Madras. They were assessed by the Joint Commercial Tax Officer, Harbour I, on the net turnover of Rs. 1, 02, 377, under the Central Sales Tax Act, for the year 1959-60. Of this turnover, Rs. 62, 342 was held liable to tax at the rate of 1 per cent. and Rs. 40, 035 to tax at the rate of seven per cent. They preferred an appeal before the Appellate Assistant Commissioner of Commercial Taxes, Madras, claiming that of the turnover of Rs. 40, 035, Rs. 34, 215 should be taxed only at the rate of one per cent. The Joint Commercial Tax Officer had levied the tax at the rate of seven per cent., as the petitioner did not file the original C Form as required by the Act and the rules framed thereunder in respect of a few transactions, and as the C Forms filed in respect of a few transactions were not duly and properly filled up. The petitioner produced certain letters before the appellate authority alleged to have been written from non-resident buyers outside the State to whom goods were sold, but the appellate authority declined to act upon them. The petitioner's appeal was dismissed. They filed a further appeal before the Sales Tax Appellate Tribunal, Madras, and they reiterated their claim that the turnover relating to the sum of Rs. 34, 215 should suffer tax only at the rate of one per cent. The Tribunal noted a mistake in regard to one transaction in respect of which the actual turnover was only Rs. 1, 640 though the petitioner claimed it to be for a sum of Rs. 1, 650. The Tribunal acted upon the evidence produced by the petitioner and took the view that the claim for the levy of tax at concessional rate was irresistible. The petitioner was therefore granted relief on a turnover of Rs. 34, 205 which was to be assessed at one per cent. instead of seven per cent. This revision petition has been preferred by the State challenging the correctness of the said order of the Tribunal.The following tabular statement extracted from the order of the Tribunal gives the particulars of the turnover and the reason for taxation at the enhanced rate of seven per cent.

------------ Invoice No. and date Turnover Reason for taxing at enhanced rate

1. 1545 dated 3-4-59 Rs. 1, 650 No C Form filed

2. 1549 " 21-4-59 " 1, 440 Do.

3. 1553 " 4-6-59 " 7, 750 Purpose not marked.

4. 1565 " 6-9-59 " 350 Date of registration not marked.

5. 1568 " 10-11-59 " 1, 000 Purpose not marked.

6. 1569 " 18-11-59 " 400 Purpose not marked and registration date not found.

7. 1574 " 3-2-60 " 6, 750 Purpose not marked.

8. 1575 " 12-2-60 " 7, 000 Do.

9. 1577 " 17-3-60 " 7, 000 Do.

10. 1578 " 18-3-60 " 875 Do.

In regard to S. Nos. 1 and 2, the petitioner did not file the prescribed C Forms before the assessing authority. It is alleged on their behalf that the C Forms were misplaced and could not be traced in time to enable them to file them before the assessing authority at the proper time. In respect of S. No. 2 the original C Form does not contain the date of registration of the buyer. The duplicate C Form however shows that the date of registration was 18th July, 1959, though the sale was effected on 21st April, 1959. The concessional rate of taxation at the rate of one per cent. is provided for under section 8(1) of the Central Sales Tax Act. Section 8(4) of the Act provides that section 8, 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 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. The prescribed form is Form C under the Central Sales Tax (Registration and Turnover) Rules. Rule 10 of the Central Sales Tax (Madras) Rules, 1957, provides that every registered dealer who wishes to purchase goods from an

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1961 Supreme(Mad) 386

High Court of Judicature at MadrasTHE HONOURABLE MR. JUSTICE JAGADISAN & THE HONOURABLE MR. JUSTICE SRINIVASANDeputy Commissioner of Commercial Taxes, Madras Division - AppellantVersusManohar Brothers - RespondentCase No : Tax Case No. 128 of 1961 (Revn. No. 77 of 1961)Decided On : 20 December 1961

The benefit of the concessional tax rate under section 8(1) of the Central Sales Tax Act is conditional upon the assessee producing and furnishing the prescribed declaration C Form, in the prescribed manner.