Appellate acceptance of Form C can support concessional inter-State tax where it determines the correct liability.

Form C produced at the appellate stage in support of concessional tax on inter-State sales should not be rejected on a purely technical basis where it goes to the correct tax liability. The dealer had explained that the declaration was unavailable at assessment and was filed with an application under section 12B of the U.P. Trade Tax Act, 1948 during appeal. The High Court treated that explanation as sufficient, held that the application ought to have been allowed, and set aside the rejection. The matter was remanded for fresh consideration of Form C and its effect in accordance with law.

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Issues: Whether the dealer's declaration in Form C, filed at the appellate stage along with an application under section 12B of the U.P. Trade Tax Act, 1948, ought to have been accepted so as to grant the concessional rate of tax on inter-State sales.

Analysis: The assessment had initially proceeded at 2 per cent and was later sought to be enhanced to 4 per cent in proceedings under section 22 of the U.P. Trade Tax Act, 1948. In that situation, the dealer explained that Form C was not available at the time of assessment and was produced during appeal. The rejection of the application under section 12B was found to be too technical, since the statutory scheme does not justify taxation beyond what is legally due and permits consideration of material that goes to the correct tax liability, subject to verification.

Conclusion: The application under section 12B ought to have been allowed, the rejection order was set aside, and the matter was remanded for fresh consideration of Form C and its effect in accordance with law.

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