Sales tax deduction conditions: a delegated rule cannot add a substantive declaration requirement absent from the parent statute.

Rule 25C of the Rajasthan Sales Tax Rules was treated as procedural only, because section 2(s)(iv) of the Rajasthan Sales Tax Act allowed deduction for sales to registered dealers for resale within the State without making production of declaration form S.T. 17 a statutory condition. The court held that delegated rule-making under section 26(5) could not add a substantive restriction absent from the parent Act, so the declaration requirement operated merely as a mode of proof and not as a mandatory condition for deduction. The assessee therefore was not obliged to obtain the form for such sales.

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Issues: Whether, for the year 1961-62, the requirement under rule 25C of the Rajasthan Sales Tax Rules to obtain and file declaration form S.T. 17 for sales to registered dealers for resale within the State was directory or mandatory.

Analysis: Section 2(s)(iv) of the Rajasthan Sales Tax Act allowed deduction from taxable turnover in respect of goods taxable at the last point and sold to registered dealers for resale within the State, but did not itself make the deduction conditional upon production of a declaration in the prescribed form. The rule-making power under section 26(5) could not be used to impose an additional substantive restriction that was not found in the Act. A rule prescribing the mode of proof could therefore operate only as a procedural requirement. On that basis, the declaration requirement in rule 25C was treated as analogous to the rule considered in the Orissa decision, where a similar requirement was held to be directory.

Conclusion: The requirement in rule 25C was only directory and not mandatory, and the assessee was not obliged to obtain the declaration form for such sales. The reference was answered in the affirmative.

Ratio Decidendi: A rule framed under delegated legislation cannot create a substantive condition for deduction unless the parent statute itself makes compliance with that condition mandatory; where the statute is silent, the procedural requirement is directory only.

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