TMI Blog1981 (1) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... y between the parties related to the 12 transactions, it has now transpired that so far as 4 transactions are concerned the assessee was not able to show that any C forms had at all been issued by the purchasing dealer and these transactions are no longer in issue before us. But in respect of the remaining 8 transactions details of which have been given on page 2 of the order of the Additional District Judge (who disposed of the revision petition against which this reference has been made), the position is somewhat different and we are concerned only with these 8 transactions, the total sale proceeds in respect of which comes to Rs. 2,41,555.68. These 8 transactions are said to have taken place on 10th June, 1968, 26th June, 1968, and 28th August, 1968. By the time the assessment was made and the further proceedings took place the purchasing company had gone into liquidation. But the assessee was able to ascertain from the liquidator of the said company the information that the records of the company pertaining to the Karnal branch indicated purchases from the assessee-company and that eight sales tax C forms dated 12th February, 1969 (and not 14th February, 1969, as mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the learned Additional District Judge is a very equitable and fair order in the circumstances of the case particularly because there is no suggestion anywhere that there is anything wrong with the genuineness of the transactions or any doubts as to the possession by the purchasing dealer of a certificate enabling the sellers to obtain the concessional sate of tax under section 8 of the Act. But Sri R.C. Chawla, the learned counsel for the applicant, points out that the question involved is a pure question of law as to the proper interpretation of the provisions of section 8 of the Central Sales Tax Act and the provisions of rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957. He submits that, in view of the decision of the Supreme Court in the case of Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer[1965] 16 S.T.C. 607 (S.C.)., it is clear that these provisions have to be construed strictly and that unless there is a strict compliance with the provisions of the statute the assessee was not entitled to the concessional rate of tax. He submits that a liberal construction was not justified having regard to the scheme and object of the Act and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name and address of the seller and the State to which he belongs. The form itself makes it clear that the counterfoil is to be retained by the purchasing dealer. The duplicate is to be handed over to the selling dealer and the original is also to be handed over to the selling dealer in order to enable him to file the same before the sales tax authorities from whom he claims a deduction in respect of the sale covered thereby. We shall refer to the provisions of the Central Sales Tax (Delhi) Rules which govern the issue as well as the utilisation of these forms. But before doing so we may extract the provisions of sub-rules (2) and (3) of rule 12 which make a specific provision regarding cases where a form of declaration is lost: "(2) Where a blank or duly completed form of declaration is lost, whether such loss occurs while it is in the custody of the purchasing dealer or in transit to the selling dealer, the purchasing dealer shall furnish in respect of every such form so lost an indemnity bond to the notified authority from whom the said form was obtained, for such sum as the said authority may, having regard to the circumstances of the case, fix. Such indemnity bond shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was made subject to a proviso under which in the case of such sales a declaration form duly filled up and signed by the registered dealer to whom the goods were sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority had to be furnished in the prescribed manner by the dealer who purchased the goods. In other words, the terms of section 5(2)(a)(ii) construed by the Supreme Court were more or less analogous to the provisions of section 8(1) and 8(4) of the Central Sales Tax Act, with this difference that, whereas under the Bengal Finance (Sales Tax) Act the proviso to section 5(2)(a)(ii) required the declaration form to be filled up and produced, under the Central Sales Tax Act the requirement is contained in sub-section (4) which starts by saying that the concessional rate provided for in section 8(1) will not be available to a dealer unless the declaration is filed. Subba Rao, J. (as his Lordship then was), pointed out that section 5(2)(a)(ii) was a provision exempting a specific turnover of a dealer from sales tax and had to be strictly construed. The substantive clause gave the exemption and the proviso which qualified the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een alleged here, from obtaining a duplicate as provided for in rule 12(3). Nor has it been explained in this case why that was not done. The question, however, is whether the production by the assessee not of the duplicate form contemplated in rule 12(3) but a mere photostat copy of the counterfoil of the original form would be sufficient compliance with the provisions of rule 12(3). It is urged on behalf of the assessee that the production of the photostat copy is as good as the production of the original and should be treated as compliance with the provisions of rule 12(3). We are unable to accept this contention for a very important reason. What the assessee has now produced by way of photostat copy is only the counterfoil of the C forms that are said to have been issued on 12th February, 1969, by the purchasing company in favour of the assessee. It is claimed that the original and the duplicate of the above counterfoil had been lost. Obviously, since the purchasing company has gone into liquidation, the liquidator is not in a position to personally vouch for the transaction which the company had entered into and he could say nothing more than that the counterfoil is on the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate parts pertaining to these declaration forms had also been issued only to the present assessee. The assessee is not in a position to say that because according to it these forms were never received by it; on the other hand, the purchasing dealer cannot vouch for the same because the company is no longer in business and the official liquidator is not in a position to say anything more than that the original counterfoils show the name of the assessee in respect of these transactions. These arguments of Sri Chawla also assume great importance in view of the stringent provisions contained in the Central Sales Tax (Delhi) Rules regarding the issue and utilisation of these declaration forms. Rule 4 requires that a registered dealer who wishes to purchase goods from another such dealer on payment of tax at the rate applicable to sales between registered dealers for the purposes specified in the purchasing dealer's certificate of registration should obtain from his taxation officer blank declarations in form C. As soon as the transaction of purchase is entered by him he will have to fill in all the required particulars in the form in all its three parts, affix his signature in the spa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to ensure that the counterfoil retained by the dealer and the other parts according to the purchaser are identical on all respects and deal with the same transaction. The essence of these rules and regulations is that before a selling dealer is able to claim the benefit of concessional tax he should be able to produce the original and duplicate issued to him by the purchasing dealer in the first instance or a duplicate which will also contain these two portions of the form issued along with a declaration subscribed to by the purchasing dealer subsequently on the strength of his earlier records and his personal knowledge and for which he will have to account in due course to the sales tax authorities from whom he obtained these declaration forms. We are convinced on a perusal of the various provisions contained in the Act and the Rules that the requirement for the filing of a declaration form in a particular manner is not a mere formal or technical requirement but that it is intended as pointed out by the Supreme Court to achieve the object of preventing the forms from being used for the commission of fraud and also for purposes of administrative convenience. We are, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducing the photostat copies of the counterfoils. The stand taken by the applicant is also supported by the decision of the Andhra Pradesh High Court in State of Andhra Pradesh v. C.S. Bhoomi Reddy[1970] 26 S.T.C. 444., of the Orissa High Court in State of Orissa v. Orissa Polish Works[1970] 26 S.T.C. 480., and of the Allahabad High Court in Commissioner, Sales Tax, U.P. v. P.C. Majumdar and Co. Ltd. [1979] 44 S.T.C. 154. Reference was made on behalf of the respondent to the decision of the Madras High Court in Shansshia Oil Mills v. State of Madras[1967] 20 S.T.C. 481. But on going through the decision we find that the only point decided by the court was as to whether a photostat copy of the declaration could be filed at an appellate stage: the question whether the filing of a photostat copy would be sufficient compliance with the rules was left to be decided by the Tribunal. For the above reasons we answer the question referred to us and as modified by us earlier in the negative and by saying that the assessee was not entitled to the concessional rate of taxation under section 8(1) in respect of sales of the turnover of Rs. 2,41,555.68. The reference is answered accordingly. Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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