Form C proof requirement for interstate sales exemption upheld as a valid evidentiary rule under sales tax law

Rule 12(3)(ii) of the Central Sales Tax (Andhra Pradesh) Rules requires production of form C with form E-1 as the evidentiary mode for claiming exemption under section 6(2) of the Central Sales Tax Act. The rule is valid because section 6(2) exemption depends on satisfaction of statutory conditions, including proof of a subsequent inter-State sale and the relevant description of goods, while section 13(3) permits rules consistent with the Act to implement its purpose. The rule does not add a substantive condition; it only adopts an existing statutory form of proof. The challenge to the rule failed, and the requirement to furnish form C was upheld as valid.

---

---

Issues: Whether rule 12(3)(ii) of the Central Sales Tax (Andhra Pradesh) Rules, requiring production of form C along with form E-1 for claiming exemption under section 6(2) of the Central Sales Tax Act, is ultra vires.

Analysis: Exemption under section 6(2) is available only if the statutory conditions are satisfied, including proof that the sale is a subsequent inter-State sale, that the goods are of the description referred to in section 8(3), and that the purchaser and seller are registered dealers. The proviso to section 6(2) itself contemplates proof of the prior sale through the prescribed certificate, and section 13(3) authorises State rules not inconsistent with the Act to carry out its purposes. Rule 12(3)(ii) merely adopts, for section 6(2) claims, the form C mechanism already prescribed under section 8(4) for proving that the goods are of the requisite description. The rule therefore operates as a prescribed mode of proof and not as an additional substantive condition. It is consistent with the statutory scheme and supports the object of enabling exemption while protecting revenue.

Conclusion: Rule 12(3)(ii) is not ultra vires; the requirement to furnish form C is valid.

Final Conclusion: The challenge to the rule failed and the writ petition stood dismissed with costs.

Ratio Decidendi: Where the parent statute authorises rules to carry out its purposes and is silent on the mode of proof for an exemption, a rule prescribing a prescribed form already used in the statutory scheme as the evidentiary method is valid if it is consistent with the Act and does not impose an impermissible substantive condition.

---