TaxTMI 
TaxTMI 
2016 (8) TMI 248
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dealer under the Kerala Value Added Tax Act, 2003 and the CST Act. They filed the writ petition challenging Exts.P8 and P9 assessment orders passed under the KVAT Act and CST Act for the assessment year 2005-06 and Ext.P10 assessment order passed under the CST Act for the assessment year 2006-07. In the writ petition, they also prayed that Rule 11B(2)(c) of the CST Kerala Rules be declared invalid and ultra vires the CST Act and the Rules framed thereunder by the Central Government. 3. The writ petition was admitted only with respect to the challenge raised against the rule and it was made clear that it would be open to the respondents to pursue the statutory remedies against the assessment orders that were challenged. In that writ petition, learned single Judge has rendered the judgment under appeal and the ground on which the rule has been interfered with is reflected in paragraph 16 of the judgment, which reads thus: "16. The only condition to attract the statutory mandate contained in Section 6(2) is submission of the documents prescribed in the 1st proviso to Section. Therefore, once the documents prescribed under the 1st proviso is submitted in respect of the subsequent s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that sale had taken place inside that State. (2) Notwithstanding anything contained in sub- section (1) or sub-section (1A), where a sale of any goods in the course of inter-State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by a transfer of documents of title to such goods,- (a) to the Government, or (b) to a registered dealer other than the Government, if the goods are of the description referred to in sub-section (3) of section 8, shall be exempt from 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 and within the prescribed time or within such further time as that authority may, for sufficient cause, permit,- (a) 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 prescrib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferred to in clause (b) of the preceding proviso in respect of a subsequent sale of goods if,- (a) the sale or purchase of such goods is, under the sales tax law of the appropriate State exempt from tax generally or is subject to tax generally at a rate which is lower than three per cent or such reduced rate as may be notified by the Central Government, by notification in the Official Gazette, under sub- section (1) of section 8 (whether called a tax or fee or by any other name): and (b) the dealer effecting such subsequent sale proves to the satisfaction of the authority referred to in the preceding proviso that such sale is of the nature referred to in this sub- section." 7. As per section 6(1), subject to the other provisions contained in the Act, every dealer shall, with effect from such date as the Central Government may, by notification in the Official Gazette appoint, not being earlier than thirty days from the date of notification, be liable to pay tax under the Act on all sales of goods, other than electrical energy, effected by him in the course of inter-State trade or commerce during any year on and from the date so notified. As per sub-section (2), prior to its ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hout prejudice to the powers conferred by sub-section (3), the State Government may make rules for all or any of the following purposes, namely:- (a) xxx xxx (c) the furnishing of any information relating to the stocks of goods of purchases, sales and deliveries of books by, any dealer or any other information relating to his business as may be necessary for the purposes of this Act;" 10. It would appear that while the statutory provisions stood thus, the Board of Revenue had issued circulars directing the assessing authorities to insist on production of documents of title to the goods like lorry receipt/railway receipt or bill of lading evidencing endorsement of such documents, from the assessment year 1991-92 onwards. Validity of these circulars was questioned before this Court and in the judgment in P.A.George v. Assistant Commissioner of Sales Tax (Assessment) I, Special Circle, Alappuzha [(1998) 110 STC 25], this Court held that the Act or the Rules did not confer any power on the Board of Revenue to issue any direction of the nature contained in the circulars and accordingly, the circulars were declared as non est in law. 11. Apparently, in order to get over the situ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all be submitted. It is pointed out that once these requirements are satisfied by a dealer, the benefit of section 6 cannot be denied. According to him, having regard to the language used by the legislature, the power conferred on the rule making authority is only to prescribe the authority, manner, time, particulars and form in which the form or certificate is to be submitted. It is stated that when such is the restricted power that is conferred, the rule making authority cannot prescribe that for availing of the benefit of Section 6(2), additional documents such as lorry receipts, railway receipts bill of lading etc. shall be produced. This, according to the learned counsel, is tantamount to amending section 6(2) of the Act and hence, is in excess of the rule making power and that therefore, rule 11B(2)(c) is invalid. 15. Though this argument would, at the first blush, appear to be attractive, on a closer scrutiny of the statutory provisions, we are unable to accept it. First of all, Section 6 providing for exemption from levy of tax and prescribing the production of certificate a declaration, as the case may be, for availing of the exemption, did not deprive the rule making aut....