( 1. ) THIS is a reference under Section 44 of the M. P. General Sales Tax Act, 1958, made by the Board of Revenue at the instance of the Commissioner of Sales Tax to obtain the opinion of this court on the following question, namely

:

Whether a subsequent sale to be entitled for exemption under Section 6 (2) of the Central Sales Tax Act, 1956, must be supported by the production of C form declarations (in addition to form E-I) as required by Rule 8-D of the Madhya Pradesh Sales Tax (Central) Rules, 1957, or whether the assessing authority is bound to grant exemption on production of E-I form from the selling dealer even though no C form declarations from the purchasing dealer are produced? This question arises out of the Tribunals order dated 28th October, 1969, passed in Appeal No. 247-IV/68, which was an appeal under Section 38 (2) of the M. P. General Sales Tax Act, 1958. The relevant period of assessment is 1963-64.

( 2. ) THE assessee, M/s. Shivnarayan Jagatnarayan of Raigarh, is a dealer in foodgrains, oil-seeds and forest produce, etc. During the relevant period, the assessee purchased oil-seeds and sold them by endorsing the railway receipts in favour of the purchasers. The turnover involved is about Rs. 2,00,000. It is not in dispute that this turnover represents "subsequent sale" within the meaning of Section 6 (2) of the Central Sales Tax Act, 1956 and, as such, is exempt from payment of Central sales tax. The relevant provisions applicable to the facts of the present case, as they then stood, read as follows: Proviso to Section 6 (2) of the Central Sales Tax Act, 1956: "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. Rule 12 (2) of the Central Sales Tax (Registration and Turnover) Rules, 1957: "the certificate referred to in Sub-section (2) of Section 6 shall be in form E-I or form E-II, as the case may be. Rule 8-D of the M. P. Sales Tax (Central) Rules, 1957 : "the exemption provided in Sub-section (2) of Section 6 of the Act shall not be granted unless the dealer making the sales referred to in Rules 8-B and 8-C, furnishes to his appropriate Sales Tax Officer the original of the declaration form C received from the registered dealer to whom he sold the goods together with the portion marked original of the certificate in form E-I or E-II, as the case may be.

( 3. ) ADMITTEDLY, the assessee complied with the requirement of Rule 12 (2) of the Central Sales Tax (Registration and Turnover) Rules, 1957, inasmuch as the requisite certificate in form E-I was furnished by it but it did not literally comply with Rule 8-D of the M. P. Sales Tax (Central) Rules, 1957, inasmuch as the declaration in form C prescribed therein was not furnished by the assessee in addition to giving the certificate in form E-I, The question which arose for determination was whether the assessee was entitled to the exemption from payment of Central sales tax on these facts, in accordance with Section 6 (2) of the Central Sales Tax Act, 1956, full compliance with which is found proved.

( 4. ) THE Tribunal has held that since Section 6 (2) does not require production of declarations in form C, Rule 8-D of the M. P. Sales Tax (Central) Rules, 1957, framed by the State Government, can only be directory and not mandatory. Taking this view, the Tribunal came to the conclusion that the assessee was entitled to the exemption claimed by it under Section 6 (2) of the Central Sales Tax Act, 1956.

( 5. ) AGGRIEVED by the aforesaid view taken by the Tribunal on the nature of Rule 8-D of the M. P. Sales Tax (Central) Rules, 1957, the Commissioner of Sales Tax applied for and was granted a reference to this court for answering the aforesaid question. This is how the question comes up