Central sales tax on rice and proof of branch transfers: concessional rate depends on taxed paddy, and Form F is not exclusive proof.

Concessional Central sales tax on inter-State rice sales was available only where the dealer proved that the rice had been procured from paddy purchased inside the State and subjected to purchase tax; absent that factual linkage, the reduced rate did not apply and tax was correctly computed at 8 per cent. Form F under section 6-A was evidence of branch transfer, but not the exclusive mode of proof, so the dealer could rely on other evidence to show that the movement was otherwise than by sale. The reference was answered accordingly.

---

---

Issues: (i) Whether the dealer was liable to pay Central sales tax at 8 per cent on the inter-State sale of rice sold to unregistered dealers. (ii) Whether production of declaration in Form F was mandatory for claiming that branch transfers were otherwise than by way of sale, or whether alternative evidence could be adduced.

Issue (i): Whether the dealer was liable to pay Central sales tax at 8 per cent on the inter-State sale of rice sold to unregistered dealers.

Analysis: The rate under section 8(2-A) of the Central Sales Tax Act applies at twice the State rate where the relevant goods are taxable at 4 per cent. Section 15(c) grants a reduction only if the rice sold in inter-State trade is shown to have been procured out of paddy purchased inside the State and subjected to purchase tax. On the facts referred, the necessary linkage between the rice sold and the taxed paddy was not established in the statement of facts. In that situation, the concession under section 15(c) was unavailable and the tax was correctly computed at 8 per cent.

Conclusion: The dealer was liable to pay Central sales tax at 8 per cent on the turnover of inter-State sale of rice.

Issue (ii): Whether production of declaration in Form F was mandatory for claiming that branch transfers were otherwise than by way of sale, or whether alternative evidence could be adduced.

Analysis: Section 6-A of the Central Sales Tax Act makes Form F evidence of branch transfer, but not conclusive proof that the movement was otherwise than by way of sale. The assessing authority may enquire further into the true nature of the transactions, and the dealer may support the claim by other evidence. The requirement in rule 12(5) and rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules was treated as procedural, not mandatory in the sense of excluding other proof.

Conclusion: Production of Form F was not mandatory and alternative evidence could be adduced.

Final Conclusion: The reference was answered by upholding the tax levy at 8 per cent on the rice turnover while recognising that branch transfers could be proved by evidence other than Form F.

Ratio Decidendi: Under the Central Sales Tax Act, concessional reduction of tax on rice is available only when the assessee proves that the rice was procured out of taxed paddy, and Form F is not the exclusive mode of proving that a branch transfer was not a sale.

---