E-1 certificate validity under the Central Sales Tax framework cannot be restricted by a State rule adding extra conditions.

Section 6(2) exemption for subsequent sales during movement of goods depends on production of the prescribed certificate, and the Central Rules required only the prescribed form. A State rule could not add a further condition that an E-1 certificate must cover only one transaction, because the Central framework did not impose that restriction. The certificate was treated as valid where it related to the same purchaser and goods covered by the statutory requirements. The impugned rejection of exemption was therefore unsustainable, and the statutory deduction for the second sales was allowed.

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Issues: Whether an E-1 certificate covering more than one transaction could be rejected for claiming exemption under section 6(2) of the Central Sales Tax Act, 1956, on the basis of a State rule requiring a separate certificate for each transaction.

Analysis: Section 6(2) grants exemption for specified subsequent sales during the movement of goods, subject to production of the prescribed certificate. The Central Sales Tax Act empowers the Central Government to prescribe the form and particulars of such certificates, and the Central Rules under rule 12(4) required only the prescribed form. The State rule in the Madras Rules purported to add a further condition that the E-1 certificate should not cover more than one transaction. The reasoning adopted from the earlier Supreme Court ruling on analogous C-form declarations was that a State rule cannot impose an additional burden on an outside-State dealer where the Central Rules have not imposed such a restriction. The form itself, including the particulars in columns B and D, did not necessarily require a separate certificate for each transaction, and the certificate was otherwise accepted as relating to the same purchaser and to goods covered by section 8(3).

Conclusion: The E-1 certificate was not defective merely because it covered more than one transaction, and the assessee was entitled to exemption under section 6(2).

Final Conclusion: The impugned assessment rejection was set aside and the petitioners obtained the statutory deduction claimed for the second sales.

Ratio Decidendi: Where the Central Rules prescribe only the form of a statutory certificate, a State rule cannot validly add a further condition requiring a separate certificate for each transaction in respect of an outside-State dealer.

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