Statutory tax deduction overrides conflicting contract terms; refusal to accept declaration forms could not defeat the dealer's entitlement.

A Government standard-form contract condition that refused acceptance of ST-1 declaration forms and required separate payment of sales tax was inconsistent with the Delhi Sales Tax Act, 1975. The Act conferred a statutory deduction or exemption for sales to registered dealers on production of the prescribed declaration form, and the related rule only regulated procedure and supporting documents; it did not extinguish the substantive entitlement. A contractual term cannot override a statutory tax benefit, and a void condition cannot be validated by consent or waiver. The office order and amended condition were therefore invalid to the extent they barred the statutory deduction or exemption on first-point sales.

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Issues: Whether the office order and the amended contractual condition refusing acceptance of ST-1 declaration forms and requiring separate payment of sales tax were valid, and whether the purchasing registered dealer retained the statutory right to deduction or exemption on first-point sales.

Analysis: Section 4(2)(a)(v)(B) of the Delhi Sales Tax Act, 1975 created a deduction for sales to a registered dealer on production of the prescribed declaration form, while section 5 governed the point of taxation and exemption scheme. Rule 7(1) prescribed the procedure and supporting documents for claiming the deduction, but did not take away the substantive right created by the Act. A contractual stipulation that declaration forms would not be accepted and that tax would be paid separately was inconsistent with the statute and the rules. A term in a standard form Government contract cannot override a statutory entitlement, and a void condition cannot be validated by consent or waiver where the contract is itself contrary to the Act.

Conclusion: The office order and the corresponding contractual amendment were held invalid to the extent they barred acceptance of ST-1 forms and denied the statutory deduction or exemption on first-point sales. The purchasing dealers were entitled to the statutory benefit notwithstanding the impugned condition.

Final Conclusion: The statutory exemption mechanism prevailed over the contractual condition, and the impugned office order could not curtail the registered dealer's right to claim deduction or exemption in accordance with the Act and the Rules.

Ratio Decidendi: A contractual condition in a Government standard form contract is void to the extent it conflicts with a statutory deduction or exemption conferred by the taxing statute, and procedural rules cannot be used to extinguish the substantive right created by the Act.

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