Delegated rules cannot add mandatory conditions for inter-State sale exemption; Form C is not the exclusive proof requirement.

Rule 9-B(5) was held beyond the State Government's rule-making power because section 6(2) of the Central Sales Tax Act required only the prescribed certificate in the prescribed form and did not authorise Form C as an itional condition for exemption. Rule 9-B(2), however, was upheld as a directory provision because it operated only as one mode of proving that the subsequent sale was to a registered dealer and was not the exclusive statutory method of proof. The exemption under section 6(2) could not therefore be denied merely for non-production of Form C.

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Issues: (i) Whether rule 9-B(5) of the Central Sales Tax (Madras) Rules, 1957, requiring production of Form C in addition to Form E-I for exemption under section 6(2) of the Central Sales Tax Act, was within the rule-making power of the State Government; (ii) whether rule 9-B(2) was invalid or could be read only as directory in relation to proof of sales to registered dealers.

Issue (i): Whether rule 9-B(5) of the Central Sales Tax (Madras) Rules, 1957, requiring production of Form C in addition to Form E-I for exemption under section 6(2) of the Central Sales Tax Act, was within the rule-making power of the State Government.

Analysis: Section 6(2) grants exemption to subsequent inter-State sales subject only to the conditions stated in the proviso, namely, production of the prescribed certificate in the prescribed form. The provision does not require production of Form C as an additional statutory condition. Section 13(4) did not authorise the State Government to add such a condition by rule.

Conclusion: Rule 9-B(5) was invalid and beyond the rule-making power.

Issue (ii): Whether rule 9-B(2) was invalid or could be read only as directory in relation to proof of sales to registered dealers.

Analysis: The requirement in rule 9-B(2) was capable of being understood only as one mode of proving that the subsequent sale was to a registered dealer. The Act did not insist on Form C as the exclusive mode of proof, and the revenue could not deny exemption merely because Form C was not produced.

Conclusion: Rule 9-B(2) was not invalid, but it was only directory and could not be treated as a mandatory condition for exemption.

Final Conclusion: The exemption under section 6(2) could not be denied merely for non-production of Form C, though the challenge to the rule failed overall, so the petition was dismissed with costs.

Ratio Decidendi: A delegated rule cannot impose an additional substantive condition for statutory exemption where the parent enactment prescribes only the certificate and particulars required by the proviso; a rule consistent with the Act may operate only as a directory mode of proof, not as an exclusive mandatory requirement.

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