TMI Blog2016 (8) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ice to the powers conferred as per 13(3), the State Government may make rules for all or any of the purposes enumerated therein. The purposes enumerated in clause (c) thereof include rules for furnishing of any other information relating to the business of a dealer as may be necessary for the purposes of the Act. According to us, such expansive power conferred on the rule making authority takes within its sweep, power to prescribe production of the documents that are mentioned in Rule 11B(2)(c) also for the purpose of availing of the exemption provided under section 6 of the CST Act. Even apart from that, the net result of Rule 11B(2) is that the dealer should produce documents, the details of some of which are already required to be specified in form E-I and E-II vide clause (4) thereof. In our view, these provisions of rule 11B(2)(c) do not, in any manner, run either inconsistent with the provisions of Section 6(2) nor can that rule be said to be framed in excess of the rule making power conferred under Sections 13(3) and 13(4) of the CST Act. Viewed in this manner, we are unable to sustain the judgment under appeal. Decided in favor of revenue. - WA. No. 1033 of 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Section 6(2) of the CST Act, is invalid and ultra vires being beyond the scope of power under Section 11(3). Reading of the above findings shows that according to the learned Judge, Rule 11B(2)(c) of the CST Kerala Rules has the effect of whittling down the exemption provided in section 6(2) and amending the statutory provision and therefore, the State Government have exceeded its power. It is the correctness of this finding that is raised in this appeal. 4. We heard learned Government Pleader for the appellants and the counsel appearing for the respondent assessee. 5. Before we examine the rival contentions with respect to the rule making power of the State Government, we shall survey the relevant statutory provisions contained in the CST Act. Chapter III of the CST Act contains section 6 providing for liability to tax on inter-State sales. This section, prior to its amendment by Taxation Amendment Act (Act 16 of 2007) with effect from 1.4.2007 read thus: 6. Liability to tax on inter-State sales- (1) Subject to the other provisions contained in this Act, every dealer shall, with effect from such date as the Central Government may, by notification in the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to furnish the declaration or the certificate referred 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 four per cent. (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 clause (a) or clause (b) of this sub-section. 6. By Act 16 of 2007, sub-section (2) of section 6 was substituted and the substituted sub-section (2) read thus: (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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng their movement from one State to another, any subsequent sale during such movement effected by transfer of documents of title to such goods to the Government or to a registered dealer, if the goods are of the description referred to in section 8(3), they shall be exempted from tax under the Act. However, proviso to sub-section (2) prescribe that no such subsequent sale shall be exempt from tax under sub- section (2), 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 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 authority. As a result of the amendment by Act 16 of 2007, the change made in sub-section (2) is that sales to the Government stand omitted. 8. Section 13 of the CST Act confers power to make rules. While sub-section 13(1) confers power on the Central Government to make rules, sub-section (3) thereof confers power on the State Government to make rules not inconsistent with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered dealer who claims to have made a second or subsequent sale by transfer of documents of title to the goods shall, in respect of such claim furnish to the assessing authority a photo copy of the consignee copy of the Lorry Receipt, Railway Receipt, Bill of lading bearing endorsement made by such dealer or cash receipt in favour of the purchaser taking delivery of the goods. 13. Reading of this provision would show that a purchasing dealer claiming the benefit of Section 6 (2) shall, in respect of such claim, furnish to the assessing authority a photocopy of the consignee copy of the lorry receipt, railway receipt, bill of lading bearing endorsement made by such dealer or cash receipt in favour of the purchaser taking delivery of the goods. It was this provision which was challenged in the writ petition and which challenge was upheld by the learned Single Judge. 14. Law is settled that a subordinate legislation, such as the CST Kerala Rules, should be framed within the four corners of the rule making power conferred by the parent enactment, viz., the CST Act. If the rule so framed is in excess of the power conferred on the rule making authority, rule will be ultra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and the only limitation therein is that such rules shall not be inconsistent with the provisions of the CST Act or the rules made by the Central Government under Section 13(1) thereof. The scope of such power is enlarged by section 13(4) which provide that in particular and without prejudice to the powers conferred as per 13(3), the State Government may make rules for all or any of the purposes enumerated therein. The purposes enumerated in clause (c) thereof include rules for furnishing of any other information relating to the business of a dealer as may be necessary for the purposes of the Act. According to us, such expansive power conferred on the rule making authority takes within its sweep, power to prescribe production of the documents that are mentioned in Rule 11B(2)(c) also for the purpose of availing of the exemption provided under section 6 of the CST Act. Even apart from that, the net result of Rule 11B(2) is that the dealer should produce documents, the details of some of which are already required to be specified in form E-I and E-II vide clause (4) thereof. In our view, these provisions of rule 11B(2)(c) do not, in any manner, run either inconsistent with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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