Inter-State sales tax assessment follows State turnover rules, allowing excise duty deduction despite no express Central rule

Section 9(1) and section 9(3) of the Central Sales Tax Act required inter-State sales tax to be levied and collected in the same manner as tax under the general sales tax law of the appropriate State. Applying that construction, the Court held that the State sales tax law and relevant rules governed the assessment machinery, so rule 7 of the General Sales Tax Rules, 1950, which allowed deduction of excise duty, remained available to the assessee. The absence of a corresponding deduction in rule 11(2) of the Central Sales Tax (Registration and Turnover) Rules, 1957 did not override section 9. The assessee was therefore entitled to the claimed deduction.

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Issues: Whether, for the purpose of levy and assessment of tax on inter-State sales under the Central Sales Tax Act, 1956, the assessee could claim deductions available under the State general sales tax law and the rules framed thereunder, notwithstanding the absence of an express deduction for excise duty in the Central Sales Tax (Registration and Turnover) Rules, 1957.

Analysis: Section 9(1) and section 9(3) of the Central Sales Tax Act, 1956 required the tax to be levied and collected in the same manner as tax under the general sales tax law of the appropriate State. The earlier decision construing that phrase was treated as controlling, and the Court held that the State sales tax law, including the relevant rules, governed the levy and assessment machinery for inter-State sales. Since rule 7 of the General Sales Tax Rules, 1950 allowed deduction of excise duty, the assessee was entitled to invoke that deduction for the assessment period in question. The absence of a corresponding deduction in rule 11(2) of the Central Sales Tax (Registration and Turnover) Rules, 1957 did not displace the effect of section 9.

Conclusion: The assessee was entitled to the deduction claimed, and the Revenue's challenge failed.

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