Implied Obligation to Issue C Forms for Inter-State Sales under Central Sales Tax Act

The Court held that there is an implied obligation for the Food Corporation of India to issue C forms for inter-State sales under Section 8(1) of the Central Sales Tax Act, 1956. The Corporation's refusal to provide the forms was deemed contrary to the Act's purpose of facilitating inter-State sales at a lower tax rate. Consequently, a writ of mandamus was granted in favor of the petitioner, compelling the Corporation to issue the necessary C forms for the transaction.

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Issues involved: Obligation of Food Corporation of India to issue C forms u/s 8 of Central Sales Tax Act, 1956.

Summary:
The petitioner, a registered dealer, entered into an agreement with Food Corporation of India for the supply of groundnut flour. The Corporation refused to issue C forms, necessary for inter-State sales, leading to a tax assessment at a higher rate. The petitioner sought a writ of mandamus to compel the Corporation to issue the forms.

The Court noted that the goods supplied were for inter-State sales, covered u/s 8(1) of the Act. The Act mandates a 4% tax on such sales, requiring a declaration in prescribed forms. Rule 12 specifies forms C and D for this purpose, with form C to be furnished by the buyer, in this case, the Food Corporation of India.

The Corporation argued no statutory obligation to issue C forms exists, contending it's only for tax benefits. The Court disagreed, emphasizing the Act's intent to facilitate inter-State sales at a lower tax rate. Rule 12 outlines the process, indicating the buyer's obligation to provide form C for the seller's benefit.

The Court held that while not explicitly stated, an implied obligation exists for the Corporation to issue C forms for inter-State sales. Denying this would defeat the Act's purpose of lower tax rates for such transactions. A writ of mandamus was issued to compel the Corporation to provide the necessary C forms as requested by the petitioner.

In conclusion, the Court ruled in favor of the petitioner, directing the Food Corporation of India to issue C forms for the relevant inter-State sales transaction.

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