Invalid state rule on export deduction proof cannot add restrictive declaration requirements beyond central sales tax law

A State sales tax rule was held invalid where it required export deduction claims to be supported only by form XXXIII and limited one declaration to a single sale bill or cash memo. The Tribunal reasoned that the Central Sales Tax Act and Central rules governed the form and particulars of declarations, while the State could make only non-inconsistent rules. Because export-linked or penultimate sale character could be proved by other evidence, the State could not impose a stricter declaration requirement as the sole basis for denying deduction. Rule 27C(2) was therefore struck down as inconsistent with the Central enactment and rules.

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Issues: Whether rule 27C(2) of the Bengal Sales Tax Rules, 1941, which requires a declaration in form XXXIII and restricts one declaration from covering more than one sale bill or cash memo, was within the State's rule-making competence and valid for denying deduction in respect of export sales under the Central Sales Tax Act, 1956.

Analysis: The deduction claimed turned on whether the impugned sales were penultimate sales in the course of export under section 5(3) of the Central Sales Tax Act, 1956 and section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941. The Tribunal held that the State rule, by making form XXXIII the controlling and exclusive basis and by insisting that a single declaration could not cover more than one transaction, imposed a restriction that was not authorised by the Central Act or the Central rules. The power to prescribe the form and particulars of declarations rested with the Central rule-making authority under section 13(1)(d), while the State's power under sections 13(3) and 13(4) was only to make rules not inconsistent with the Act and the Central rules. The Tribunal further held that export character could be established from other evidence and that the State could not validly treat non-compliance with the impugned form requirement as the sole ground to deny exemption.

Conclusion: Rule 27C(2) was held to be inconsistent with the Central Sales Tax Act, 1956 and the rules framed thereunder and was struck down. The revisional and appellate orders based on that rule were set aside, and relief was granted to the assessee.

Ratio Decidendi: A State rule governing proof of an export-linked deduction is invalid if it travels beyond the Central Act and Central rules by imposing an additional substantive restriction on the statutory declaration form, because the State's rule-making power cannot be exercised inconsistently with the Central enactment.

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