Section 6(2) CST exemption requires proof of endorsed title document during movement, not forms alone

Exemption under section 6(2) of the Central Sales Tax Act depends on proof that the subsequent sale was actually effected by endorsement of the document of title to the goods during movement. Mere production of forms C, EI and EII is not conclusive proof of compliance. The dealer bears the burden of establishing the essential facts, including receipt and endorsement of the relevant document of title, rather than relying only on copies of goods receipt or bank documents. Where no evidence shows that the document of title was collected from the bank or duly endorsed, the exemption claim cannot succeed.

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Issues: Whether the dealer was entitled to exemption under section 6(2) of the Central Sales Tax Act, 1956 on the strength of forms C, EI and EII without proving by evidence that the subsequent sale was effected by endorsement of the document of title during movement of goods.

Analysis: Exemption under section 6(2) depends on proof that the subsequent sale was actually effected by endorsement of the document of title to the goods while they were in movement. Mere production of forms C, EI and EII is not conclusive proof of compliance with that requirement. The burden lay on the dealer claiming exemption to establish the essential facts, including that it had obtained and endorsed the relevant document of title and not merely relied on copies of goods receipt or bank documents. On the record, there was no evidence that the dealer had collected the document of title from the bank or made the endorsement necessary to complete a subsequent Central sale.

Conclusion: The dealer was not entitled to exemption under section 6(2) on the basis of the forms alone, and the finding of the Tribunal was unsustainable.

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