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2019 (6) TMI 801 - HC - VAT and Sales TaxVires of Rule 17(20) of the Central Sales Tax (Rajasthan) Rules, 1957 - cancellation of ‘C’ forms - Rajasthan VAT Act - Reduced rate of tax - HELD THAT:- The CST Act came into force on 05.01.1957 and has throughout substantially retained Section 13 in its original form, which invests the States with the power to frame Rules. The Central Act did not confer any authority on the States to frame the Rules empowering them to cancel the declaration form/C-Form once issued. This has been taken to so mean by all other State except the State of Rajasthan, which perhaps is the only State providing so in sub-rule (20) in Rule 17 of the Rajasthan Rules on 14.07.2014, i.e., more than 61 years thereafter. This provision is apparently not only contrary to the provisions of Section 8(4) but also Section 13(1)(d), 13(3) and (4)(e). As would be seen from the Central Sales Tax Rules framed by different States, which have been produced by the petitioner for perusal of the court during the course of argument, no other State has any such provision in their Rules, like the one which is impugned in the present writ petition, i.e., Rule 17(20) of the Rajasthan Rules, conferring unto itself power for cancellation of validly issued declaration form/C-Form. The obligation of a registered dealer selling the goods to another registered dealer to avail the benefit of tax provided under Section 8(1) is only confined to furnish to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom he sells the goods. Such declaration should contain the prescribed particulars in the prescribed form and manner. Proviso to Section 8(4) stipulates that the selling dealer has to furnish such declaration within the prescribed time or within such further time as the authority may, for sufficient reason, extend. Rule 12 of the Central Rules provides a form of declaration, the particulars to be contained therein, the period within which it has to be furnished, consequence of loss of the declaration form, and the course to be adopted in that event. The State has no authority to frame a rule providing for cancellation of validly issued declaration form/form-C - Rule 17(20) of the Rajasthan Rules is declared ultra vires Section 8(4), 13(1)(d), 13(3) and 13(4)(e) of the CST Act. The communications dated 20.11.2017 and 30.11.2017 sent by the respondent no.3 to the VATO Ward-17, New Delhi, with regard to cancellation of ‘C’ Form, are declared illegal and consequently quashed and set aside. The cancellation of ‘C’ Forms made vide order dated 07.12.2017 is also quashed and set aside. Petition allowed - decided in favor of petitioner.
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