Substantial compliance for CST exemption: form E-I suffices, and added form C requirement is only evidentiary.

Rule 8-D of the M.P. Sales Tax (Central) Rules, 1957, which required production of form C in addition to form E-I for exemption under section 6(2) of the Central Sales Tax Act, 1956, was treated as a rule of proof rather than a substantive condition. The statutory scheme under section 6(2) and rule 12(2) of the Central Sales Tax (Registration and Turnover) Rules, 1957, requires only the prescribed certificate in form E-I or E-II, while form C applies to a different concessional-rate provision. Where the assessing authority is otherwise satisfied that the sale is a subsequent inter-State sale to a registered dealer, substantial compliance is sufficient and exemption remains available.

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Issues: Whether rule 8-D of the M.P. Sales Tax (Central) 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, 1956, is mandatory or merely directory, and whether exemption can be granted on production of form E-I alone where the assessing authority is otherwise satisfied that the subsequent sale qualifies for exemption.

Analysis: The statutory proviso to section 6(2) requires only that the selling dealer furnish the prescribed certificate duly filled and signed by the registered dealer from whom the goods were purchased, and rule 12(2) of the Central Sales Tax (Registration and Turnover) Rules, 1957, prescribes that certificate in form E-I or E-II. Form C is prescribed under the Central Rules for a different provision dealing with concessional rate of tax, and is not a condition precedent under section 6(2). Rule 8-D of the State Rules adds an additional requirement of form C, but that requirement is not found in the charging exemption provision or in the Central Rules. To avoid inconsistency and to preserve the statutory scheme, the added State requirement can only be treated as one of proof and not as an additional substantive condition for exemption. Substantial compliance, together with satisfaction of the assessing authority that the sale was a subsequent inter-State sale to a registered dealer, is sufficient.

Conclusion: Rule 8-D is directory and not mandatory. Production of form E-I alone, with substantial compliance otherwise established, entitles the dealer to exemption under section 6(2) of the Central Sales Tax Act, 1956.

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