TMI Blog1978 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... istered dealers under the Central Sales Tax Act, and obtained from them certificates in form E-I. The selling dealers, according to the petitioner, were instructed to despatch the goods to Bombay and send the relevant railway receipts to the petitioner at Indore. The petitioner subsequently sold these goods to dealers in Bombay, who are registered under the Central Sales Tax Act, by transfer of these documents of title, the railway receipts, to those dealers against payment of price while the goods were still in transit. 3.. According to the petitioner, under section 6 of the Central Sales Tax Act, as it stood at the relevant time, the subsequent sales in the course of interState trade effected by transfer of documents of title when the goods were in transit are not liable to tax. According to the petitioner, the petitioner under section 6 was only expected to submit form E-I as required under the Central Act to seek this exemption. 4.. Under the Central Act, the Rules have been framed by the Central Government exercising powers under sub-section (1) of section 13, which are known as the Central Sales Tax (Registration and Turnover) Rules, 1957. In these Rules, sub-rule (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this revision petition, the petitioner also obtained the necessary declaration in form C from the dealers, as required under rule 8-D of the State Rules, framed under the Central Sales Tax Act, and filed an application dated 9th May, 1974, requesting the Commissioner for permission to produce the said declarations. 8.. At the time of hearing of the revision petition, in addition to his contentions, the petitioner submitted that if, in the view of the Commissioner, the production of form C was obligatory, then, in the interests of justice, the assessment be set aside and the petitioner be permitted to produce form C, which he had obtained now. The Commissioner did not accept the prayer for production of form C, nor accepted the contentions advanced by the petitioner and rejected the revision petition by the order dated 20th June, 1974, and hence the present petition. 9.. The learned counsel for the petitioner contended that under the Central Sales Tax Act, section 6, sub-section (2), provided exemption to the petitioner in the case of subsequent sales in the course of inter-State trade if the sales were effected to registered dealers outside the State by transfer of document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Government may, by notification in the official Gazette, appoint, not being earlier than thirty days from the date of such notification, be liable to pay tax under this Act on all sales effected by him in the course of inter-State trade or commerce during any year on and from the date so notified. (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." Sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself for exemption. All that the revenue can require the dealer to do is to prove that the second sales were to registered dealers and the proof may take any form, not necessarily declarations in form C. While, therefore, we do not think that sub-rule (2) is invalid, the sub-rule understood as being merely directory, we make it clear that the revenue cannot rely on non-production of declarations in form C and merely on that ground deny exemption to the dealer to which he is entitled by section 6(2)." This decision of the Madras High Court was relied on by the Gujarat High Court in State of Gujarat v. Yakubbhai Hajihakumutdin Co.[1969] 23 S.T.C. 117. In this decision, a rule framed by the Gujarat State requiring form C for claiming exemption under section 6(2) of the Central Sales Tax Act was considered. Their Lordships observed: "Mr. Mody in this connection also rightly relied upon the decision of the Madras High Court in State of Madras v. P. Subbiah Pillai[196 7] 20 S.T.C. 263. by the Division Bench, consisting of Veeraswami and Ramaprasada Rao, JJ. It was held that, in order to get exemption under section 6(2), in respect of second inter-State sales to a registered deal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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