C form and D form requirement does not defeat exemption for inter-State sales to unregistered buyers under CST law.

The amendment to section 8(5) of the Central Sales Tax Act did not extend the C form or D form requirement to inter-State sales made to persons other than registered dealers or the Government. On a harmonious reading, the form requirement is linked to the concessional rate regime under section 8(1), while exemption for sales falling under section 8(2) remains governed by the parent enabling power and cannot be curtailed by a notification beyond that scope. The exemption therefore continued to apply to such sales, and denial of exemption on the ground of non-production of C form or D form was unwarranted.

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Issues: Whether the amendment to section 8(5) of the Central Sales Tax Act, 1956, and the follow-up notification restricted the availability of exemption to inter-State sales effected in favour of unregistered dealers or the Government where C form or D form was not produced.

Analysis: Section 8(5) is an enabling provision permitting the State Government to grant exemption or lower rates by notification, but the amendment introducing the reference to section 8(4) must be read in its proper statutory context. The requirement of furnishing C form or D form is tied to the concessional rate regime under section 8(1), which concerns sales to registered dealers or the Government. On a harmonious reading, that restriction does not control exemption granted for inter-State sales falling under section 8(2), namely sales not in favour of registered dealers or the Government. The notification issued to implement the amendment cannot be construed to curtail the substantive exemption beyond the scope of the parent provision.

Conclusion: The amended requirement of C form or D form did not apply to the assessee's inter-State sales to persons other than registered dealers and the Government, and the exemption could not be denied on that basis.

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