Mandatory declaration for tapioca exemption upheld as valid evidence of purchaser's taxable status under last-point sales tax regime.

Rule 32(14) of the Kerala General Sales Tax Rules, 1963 and Form 25 were treated as a mandatory evidentiary safeguard for claims of exemption on sales of tapioca taxable at the last point of purchase. The exemption under entry 72 was available only if the seller established that the purchaser was a dealer liable to tax, and registration under the Act was recognised as the best evidence of that status. The rule was held intra vires because, in a last-point tax regime, the prescribed declaration was necessary to verify taxable status and prevent unverified exemption claims.

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Issues: Whether rule 32(14) of the Kerala General Sales Tax Rules, 1963 and form 25 prescribed thereunder were valid and mandatory, and whether a dealer claiming exemption on sales of tapioca taxable at the last point of purchase could prove the claim otherwise than by producing a declaration from a registered purchasing dealer.

Analysis: Section 5 of the Kerala General Sales Tax Act, 1963 levied tax on the last purchaser of tapioca in the State, while section 13 required every dealer liable to tax under section 5 to obtain registration. The exemption under entry 72 of the First Schedule was available only when the seller established that the sale was to a dealer liable to tax, and registration was treated as the best evidence of that status. Rule 32(14) and form 25 were therefore understood as a statutory evidentiary safeguard to verify the purchaser's taxable status and to prevent unverified claims for exemption. The rule was distinguished from the earlier rule considered in the first-sale context, because here the goods had not suffered tax at any prior point and the only reliable method of verification was the prescribed declaration.

Conclusion: Rule 32(14) and form 25 were held to be intra vires and mandatory, and the petitioner could not claim exemption without complying with them.

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