1982 (1) TMI 182 - HC - VAT and Sales Tax

Court rules form E-I sufficient for tax exemption, form C not required. Rule 8-D considered directory.

Commissioner of Sales Tax, MP Versus Prahalad Das Ramdas

The Court ruled in favor of the assessee, stating that furnishing a declaration in form C from the purchasing dealer was not necessary for claiming ... - Issues:1. Interpretation of the requirement for claiming exemption under section 6(2) of the Central Sales Tax Act.2. Necessity of furnishing a declaration in form C from the purchasing dealer for exemption from tax.3. Applicability of rule 8-D of the M.P. Sales Tax (Central) Rules, 1957 in granting exemption for subsequent sales under the Central Act.Analysis:Issue 1:The case involved a reference under section 44(1) of the M.P. General Sales Tax Act, 1958 to determine the interpretation of the requirement for claiming exemption under section 6(2) of the Central Sales Tax Act. The Tribunal had to decide whether furnishing a declaration in form C from the purchasing dealer was mandatory for granting exemption for subsequent sales under the Central Act.Issue 2:The material facts of the case revealed that the assessee claimed exemption under section 6(2) of the Central Sales Tax Act but did not produce declarations in form C as required by rule 8-D of the Madhya Pradesh Sales Tax (Central) Rules, 1957. The assessing officer disallowed the exemption, which was upheld in the first appeal but later allowed in the second appeal by the Board of Revenue. The question arose whether the original declaration in form C was necessary for claiming exemption.Issue 3:The Court considered the applicability of rule 8-D of the M.P. Sales Tax (Central) Rules, 1957 in granting exemption for subsequent sales under the Central Act. Referring to past decisions, including Commissioner of Sales Tax, Madhya Pradesh v. Prakash Oil Mills and Commissioner of Sales Tax, Madhya Pradesh v. Shivnarayan Jagatnarayan, the Court held that it was sufficient to produce only the certificate in form E-I and that the original declaration in form C was not obligatory for claiming exemption under section 6(2) of the Central Sales Tax Act. The Court found rule 8-D to be directory and not mandatory, allowing the assessee to obtain exemption even without the production of declarations in form C.In conclusion, the Court answered the reference in favor of the assessee, stating that furnishing a declaration in form C from the purchasing dealer was not necessary for claiming exemption from tax in respect of subsequent sales under the Central Act, and only form E-I was sufficient for granting such exemption.