TMI Blog1998 (2) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents or evidence other than certificate and declaration in form E-I and form C respectively were called for. It is stated that the first respondent has not directed the petitioner to take photo copies of lorry receipts and produce before him. 3.. The complaint of the petitioners in these original petitions is that the first respondent for the first time issued notice after verifying books of accounts for the assessment years 1991-92 and 1992-93 directing the petitioner to produce photo copies of endorsed consignee copies of lorry receipt, that since there is no requirements under the Sales Tax Act or Rules to maintain photo copies of the endorsed lorry receipt and that since the first respondent has also not requested the petitioner to keep any such copy, the petitioner has not taken photo copies before the delivery of the endorsed lorry receipts to the buyers. Therefore the petitioners filed replies stating that the photo copies of the lorry receipts were never called for, for any of the previous years and therefore the petitioners have not kept the same for the assessment years 1991-92 and 1992-93, and the petitioners expressed their inability to produce endorsed lorry rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the endorsement made in the document of title. Therefore the assessing authorities are justified and is well within their jurisdiction to ask for production of the copies of lorry receipt or railway receipts. So also the rejection of the claim for exemption on the ground of non-production of those documents are legal and valid. 6.. It is also stated that the proceedings before the first respondent are only at the pre-assessment stage and therefore it is premature on the part of the petitioner to challenge the said notices in proceedings under article 226 of the Constitution of India. 7.. Sri T. Karunakaran Nambiar, learned counsel appearing for the petitioner in O.P. No. 8079 of 1997 submitted that in order to claim exemption under section 6(2) of the Central Sales Tax Act, 1956 in respect of the transit sales effected by transfer of documents of title to such goods during the movement of the goods from one State to another as a result of an inter-State transaction is only to produce a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in a prescribed form obtained from the prescribed authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Das Ramdas [1983] 52 STC 224 and Chimanlal Voerchand v. Additional Assistant Commissioner of Sales Tax [1988] 68 STC 278. He submitted that though it is only a pre-assessment notice, in view of the directions contained in the circulars issued by the Board of Revenue directing the assessing authority to insist for production of the documents referred to in the pre-assessment notice for grant of exemption under section 6(2) notwithstanding the production of E-I and C forms, the petitioners cannot expect any relief from the assessing authority since they are ordinarily bound by the directions issued by the Board of Revenue. Learned counsel with reference to the decisions mentioned above, particularly the decision of the Supreme Court, submitted that the assessing authority who is exercising quasi-judicial functions under the Act in the matter of assessments is not bound by any directions or instructions issued by the Board of Revenue or by the Government and that the assessing authority is bound to make the assessments in accordance with the provisions of the Act and the Rules. Learned counsel also submitted that since the Board of Revenue in the instant case has issued two circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the authority referred to in the preceding proviso that such sale is of the nature referred to in clause (A) or clause (B) of sub-section (2) of section 6. Learned counsel also submitted that rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 provides for production of EI and C forms only for getting the benefit of such sub-section (2) of section 6 of the Act and that the Central Sales Tax (Kerala) Rules, 1957, which has been made by the State Government in exercise of the powers vested in it under section 13(3) of the Act has also not made any provision with respect to grant of relief under section 6(2) of the Act. Learned counsel submitted that the first proviso to section 6(2) is absolute in regard to the condition for grant of exemption and that it did not give any power to the assessing authority to verify the correctness of the particulars contained in the declaration filed by the dealer as provided under the first proviso to section 6(2) of the Act. Learned counsel pointed out that if the Parliament had intended to confer such power on the assessing authority which has been done by making specific provision therefor. Learned counsel in that regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale in the above transaction to ensure that there occurs a sale of the nature mentioned in sub-section (2) of section 6. He submitted that it is for the purpose of verifying the correctness of the claim made under section 6(2) of the Act that copies of lorry receipts or railway receipts were asked to be produced. Learned Government Pleader also submitted that the circulars issued by the Board of Revenue are not inconsistent with any of the provisions of the Act and the Rules. He also submitted that if any doubt arises about the nature of the transaction for sufficient reasons, further evidences can be required to be adduced and investigation can be conducted about the purchaser, who issued form C. 10.. Considered the rival submissions. The short question required to be considered, as already stated, at the outset is as to whether there is an obligation on the petitioners to maintain or to furnish documents other than EI form and C form declarations for the purpose of claiming exemption provided under section 6(2) of the Central Sales Tax Act, 1956. In other words, the question is as to whether the assessing authority can demand secondary evidence, viz., transporting documents su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in the preceding proviso that such sale is of the nature referred to in clause (A) or clause (B) of this sub-section. 12.. Section 8(4) of the Act reads as follows: (4) The Provisions of 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) 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; or (b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government: Provided that the declaration referred to in clause (a) is furnished within the prescribed time or within such further time as that authority may, for sufficient cause permit. The relevant portion of rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 reads as follows: 12(1). The declaration and the certificate referred to in sub-section (4) of section 8 shall be in forms C and D respectivel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or certificate to be given under this Act. Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 is obviously framed by the Central Government in exercise of this power. Sub-rule (1) of rule 12 prescribes the declaration and the certificate referred to in sub-section (4) of section 8 to be in forms C and D respectively. This form is prescribed in relation to sub-section (4) of section 8 which deals with the concessional rate of tax in the case of an inter-State sale. Sub-rule (2) of rule 12 prescribes certificates in forms E-I and E-II as the case may be for the certificate referred to in sub-section (2) of section 6. 13.. From a reading of the proviso to sub-section (2) read with rule 12, it would be clear that the requirements according to these provisions to entitle the dealer effecting subsequent sale to claim exemption is only furnishing of a certificate in form E-I or E-II, as the case may be, obtained from his seller, that is the registered dealer outside State from whom the goods were purchased by him and also to furnish a declaration in form C obtained by him from his purchaser inside the State. There is no further requirement under the proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure in the space provided in the form for that purpose. Thereafter the counterfoil of the forms shall be retained by the selling dealer and the portions marked original and duplicate shall be made over by him to the purchasing dealer to whom the subsequent sale is effected. ........................ (b) The purchasing registered dealer at this link in the chain of sales who claims to have made a subsequent sale to another registered dealer by transfer of documents of title to the goods, in respect of such claim under sub-section (2) of section 6 shall furnish to the assessing authority the portion marked original of the form E-II along with the original or the declaration in form C received from the registered dealer to whom the sale is effected. (3) The procedure prescribed in sub-rule (2) shall be followed in respect of all other subsequent sales by transfer of documents of title to the goods during the movement of such goods from one State to another effected by a registered dealer to another registered dealer and a certificate in form E-II shall be used in respect of such sales. (4) The procedure for the supply, use, custody, maintenance and submission of declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. Section 6A of the Act provides that where any dealer claims that he is not liable to pay tax under this Act, in respect of any goods, on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business or to his agent or principal, as the case may be, and not by reason of sale, the burden of proving that the movement of those goods was so occasioned shall be on that dealer and for this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business or his agent or principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority, along with the evidence of despatch of such goods. Sub-section (2) of section 6A further provides that if the assessing authority is satisfied after making such inquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer under subsection (1) are true, he may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non est in law, and that the assessing authority cannot reject the claim for exemption under section 6(2) of the Act merely on the ground that the petitioners have not produced documents of title to the goods such as endorsed copies of the lorry receipts/railway receipts. The assessing authority is bound to grant exemption claimed under section 6(2) of the Act on production of E-I and C form declarations as provided under the proviso to section 6(2) read with rule 12(1) and rule 12(2) of the Central Sales Tax (Registration and Turnover) Rules, 1957. This does not mean that the assessing authority does not have any power to see whether E-I and C form declarations produced by the petitioners are genuine. All the particulars necessary for ascertaining the genuineness of the forms are contained in EI and C forms themselves as is evident from the E-I form provided under rule 12(4) of the Central Sales Tax (Registration and Turnover) Rules, 1957 and C form provided under Rule 12(1) of the said rules which are as follows: The Central Sales Tax (Registration and Turnover) Rules, 1957 Form C Form of declaration [See rule 12(1)] Name of issuing State........................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept as indicated in the Note above). The Central Sales Tax (Registration and Turnover) Rules, 1957 Name of State.............................. Serial No...................................... Form E-I Certificate under sub-section (2) of section 6. [See rule 12(4)] To be issued (in duplicate) (i) by the selling dealer who first moved the goods in the case of a sale falling under section 3(a), or (ii) by the dealer who makes the first inter-State sale during the movement of the goods from one State to another in the case of a sale falling under section 3(b). A. Name of the selling dealer B. (i) Name of the purchasing dealer (ii) Address (with State) C. (i) Name of the place and State in which movement commenced. (ii) Name of place and State to which the goods have been consigned by the signatory. D. (i) Invoice No. and date (ii) Description, quantity and value of goods (iii) Number and date of the declaration form C received from purchasing dealer with name of State of issue. (iv) Number and date of the railway receipt/trip sheet of lorry/or any other document of other means of transport. I/We the selling dealer mentioned above do certify that I/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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