C forms cannot be refused to a registered dealer on suspected misuse where valid registration covers the goods.

A registered dealer holding an uncancelled certificate of registration that authorises purchase of specified goods is entitled to obtain C forms for those goods under the Central Sales Tax Act, 1956. The issuing authority has no discretion to refuse the forms on the basis that the goods may be used in works contracts or that the forms may be misused. The statutory scheme instead provides separate remedies for suspected misuse, including penal action and amendment or cancellation of registration where appropriate. Denial of C forms on a pre-issuance inquiry into the nature of the business was therefore not justified.

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Issues: Whether a registered dealer whose certificate of registration authorises purchase of specified goods can be denied C forms on the ground that the goods may be used in works contracts or may be misused.

Analysis: The statutory scheme under section 8 of the Central Sales Tax Act, 1956, permits purchase against C forms by a registered dealer in respect of goods specified in the certificate of registration for resale or for use in manufacture or processing of goods for sale. The registration process under section 7, read with the Central Sales Tax (Registration and Turnover) Rules, 1957, authorises the dealer and specifies the goods for which the concession is available. The State rules regulate the manner of obtaining the forms, but they do not confer discretion on the issuing authority to refuse C forms once the dealer holds a valid registration certificate covering the goods. The possibility of misuse of the forms is not a ground to deny issuance; the Act and the Rules provide separate machinery for penal action and for amendment or cancellation of registration in appropriate cases.

Conclusion: The dealer was entitled to receive C forms so long as the registration certificate remained in force, and denial on the apprehension of misuse or on the basis that the business amounted to works contract was not justified.

Ratio Decidendi: A registered dealer cannot be denied C forms by the issuing authority on grounds of suspected misuse or on a pre-issuance inquiry into the nature of the business, if the certificate of registration authorises purchase of the relevant goods and remains uncancelled.

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