C form misuse cannot be probed by the seller's assessing authority to enhance tax rate.

Where a purchaser is alleged to have misused C forms in inter-State sales, the assessing authority in the seller's State cannot itself enquire into that alleged misuse or treat the forms as invalid for higher tax assessment. The proper course is for the authorities in the purchaser's State to act under section 10-A of the Central Sales Tax Act, 1956. Accordingly, mere doubt about misuse does not justify enhancing the seller's tax rate on that basis, and the declaration forms remain effective for assessment purposes unless dealt with in the purchaser's State.

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Issues: Whether the turnover relating to sales of valves was liable to be assessed at the higher rate on the ground that the C forms produced by the purchasers were invalid or misused.

Analysis: The liability depended on whether the declaration forms could be questioned by the taxing authority in the State where the seller was assessed. The Court applied the principle that, where the purchaser is alleged to have misused the declaration, the proper course is for the authorities in the purchaser's State to proceed under section 10-A of the Central Sales Tax Act, 1956. The assessing authority in this State could not conduct an enquiry into the alleged misuse of the C forms, and any doubt as to misuse did not justify enhancement of the seller's tax rate on that basis.

Conclusion: The C forms were not to be treated as invalid for the purpose of enhancing the tax on the assessee, and the revision was dismissed.

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