2003 (4) TMI 513 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality and validity of the three impugned orders by the sales tax authorities.
2. Entitlement of the petitioner to exemption from payment of further tax under section 6(2) of the Central Sales Tax Act, 1956.
3. Consideration of non-statutory E-I form as proof of purchase and subsequent sale.

Detailed Analysis:

1. Legality and Validity of the Three Impugned Orders:
The petitioner challenged three orders passed by the sales tax authorities: the Commercial Tax Officer, the Assistant Commercial Taxes Officer, and the Appellate and Revisional Board. The Commercial Tax Officer disallowed the petitioner's claim for exemption due to non-production of statutory declarations in form E-I. The appellate authority upheld this decision, citing that the amendment to Rule 12(3) of the Central Sales Tax (Andhra Pradesh) Rules, 1957, which mandated the use of stationery E-I forms, could not be applied retrospectively to transactions from 1981. The revising authority dismissed the petitioner's application in a cryptic manner, citing defects in the E-I form.

2. Entitlement to Exemption Under Section 6(2) of the Central Sales Tax Act, 1956:
The court examined whether the petitioner was entitled to exemption from payment of further tax under section 6(2) of the Central Sales Tax Act, 1956. The petitioner argued that they had substantially complied with the requirements under the law by furnishing an E-I form issued by the A.P. Government and a C form issued by the Indian Oil Corporation. The court noted that under section 6(2), subsequent sales during the movement of goods from one state to another are exempt from tax if they are made to the Government or a registered dealer, provided the necessary certificates and declarations are furnished.

3. Consideration of Non-Statutory E-I Form:
The petitioner produced a non-statutory E-I form, duly counter-signed by the appropriate officer of the Commissioner of Sales Tax, Andhra Pradesh, to prove the first sale. This form was later legalized in 1985. The court found that the sales tax authorities had arbitrarily rejected this proof, despite it being subsequently legalized. The court emphasized that the object of the statute is to establish the second sale, and the non-statutory E-I form, along with the C form for the second sale, proved beyond reasonable doubt that the first sale took place from the Andhra Pradesh dealer to the petitioner.

Conclusion:
The court concluded that the three orders passed by the sales tax authorities were without lawful exercise of jurisdiction as they had not applied the correct law. The court set aside these orders and declared that the petitioner was entitled to exemption under section 6(2) of the Central Sales Tax Act, 1956. The application was allowed without any order as to costs.