( 1. ) BY this reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958 (2 of 1959), made at the instance of the Commissioner of Sales Tax, Madhya Pradesh, the Tribunal has referred to us the following questions of law : (1) Whether Explanation to Section 4 (2) of the Central Sales Tax Act is applicable only to inside sales and not to inter-State sales ?

(2) Whether, under the facts and circumstances of the case, one c Form submitted by the assessee under the Central Sales Tax Act was valid ?

( 2. ) THE questions arise in this manner. The assessee, Messrs Girja Prasad Sunderlal, Satna, is a dealer in tendu leaves at Satna. In proceedings for assessment of sales tax for the year 1961-62, the assessee was assessed to pay tax at 7 per cent, on a turnover of Rs. 81,954. 15 P. from sales of tendu leaves to one Messrs A. S. Kasim and Brothers of Tadpali in Andhra Pradesh. The assessing authority declined to assess the turnover at 1 per cent, under Sub-section (1) of Section 8 of the Central Sales Tax Act, 1956 (74 of 1956), on the ground that the declaration in Form "c" of the purchasing dealer submitted by the assessee was invalid being contrary to the proviso to Rule 8 of the Madhya Pradesh Sales Tax (Central) Rules, 1957, because in his view there were two distinct contracts of sale inasmuch as the tendu leaves were despatched from separate places and the aggregate of the sale price exceeded Rs. 5,000. The Deputy Commissioner of Sales Tax, Jabalpur, confirmed the order of the assessing authority. On appeal, the Tribunal accepted the contention of the assessee by holding that, in the absence of any evidence to the contrary, its plea that there was in reality only one transaction of sale should be upheld. The Tribunal accordingly held that the declaration in Form "c" submitted by the assessee was perfectly valid. Apart from this, the Tribunal also disagreed on the applicability of Explanation to Section 4 (2) of the Central Sales Tax Act, to the transaction in question, which admittedly was in the course of inter-State trade and commerce. It was of the view that the Explanation only applied to inside sales.

( 3. ) HAVING heard the counsel, we are of the opinion that the reference on the second question should be answered in favour of the assessee. The Central Sales Tax Act provides, inter alia, by Sub-section (4) of Section 8, that in order to qualify for the lower rate of tax in respect of sales in the course of inter-State trade and commerce, the dealer selling goods has to furnish to the prescribed authority, in the manner prescribed, a declaration duly filled and signed by the registered dealer to whom the goods are sold. The expressions "prescribed authority" and "prescribed manner" mean the authority and manner prescribed by rules made under the Act. Section 13 (1) of the Central Sales Tax Act authorises the Central Government to make rules providing, inter alia, the form in which, and the particulars to be contained in, any declaration or certificate to be given under the Act.

( 4. ) THE assessee did furnish the requisite declaration in Form "c" prescribed under the Rules, framed by the Central Government, in exercise of the powers vested in them by Section 13 (1) (d) of the Act. Its liability to pay tax at the higher rate proceeds on the breach of the proviso to Rule 8 of the Madhya Pradesh Sales Tax (Central) Rules, 1957, framed by the Madhya Pradesh Government under Sections 13 (3) and 13 (4) (e ). The relevant rule reads as follows : 8. (1) (a) A registered dealer, who wishes to purchase goods from another such dealer on payment of tax at the rate applicable under the Act to sales of goods by one registered dealer to another, for the purpose specified in the purchasing dealers certificate of registration, shall obtain from the authority mentioned in Sub-rule (1) or any other officer as may be authorised by the Commissioner in this behalf, blank declaration form in Form c as prescribed under