Form-F declarations and dispatch evidence prove consignment sales, while additional state record requirements remain directory and non-controlling.

Section 6-A of the Central Sales Tax Act requires a dealer claiming stock transfer or consignment sales to prove movement of goods through duly furnished Form-F declarations and evidence of dispatch, and the commentary states that valid Form-F forms supported by dispatch documents satisfy that burden. It further states that an U.P. rule requiring additional records is only evidentiary and directory, so non-compliance cannot override the statutory proof method or convert the transfers into inter-State sales merely because the consignee may have misused the forms. For the 1996-97 assessment, the text states that best judgment assessment could not stand without a valid defect notice and reasonable opportunity under the State trade tax procedure.

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Issues: (i) Whether the dealer had discharged the burden of proving stock transfer/consignment sales under Section 6-A of the Central Sales Tax Act by producing Form-F declarations and evidence of dispatch, and whether compliance with Rule 4(4) of the Rules framed in U.P. under the Central Sales Tax Act was mandatory. (ii) Whether, for the assessment year 1996-97, the assessment could be sustained without a valid notice and opportunity under Section 7(3) of the U.P. Trade Tax Act read with Rule 41(8) of the rules framed thereunder.

Issue (i): Whether the dealer had discharged the burden of proving stock transfer/consignment sales under Section 6-A of the Central Sales Tax Act by producing Form-F declarations and evidence of dispatch, and whether compliance with Rule 4(4) of the Rules framed in U.P. under the Central Sales Tax Act was mandatory.

Analysis: Section 6-A requires the dealer claiming transfer otherwise than by sale to prove movement of goods by furnishing a duly filled declaration in the prescribed Form-F along with evidence of dispatch. The record showed that the dealer produced Form-F declarations and dispatch documents for the turnover claimed as consignment sales, and no defect was found in the Forms-F themselves. The Court held that the purchaser or consignee's misuse of forms, or the possibility that forms were stolen or not issued to them, could not by itself defeat the dealer's claim in the absence of any finding that the forms produced by the dealer were not genuine. Rule 4(4) of the U.P. rules, being only evidentiary in nature and in substance analogous to a directory requirement, could not override Section 6-A.

Conclusion: The dealer was entitled to claim consignment sales on the basis of Form-F and dispatch evidence, and non-compliance with Rule 4(4) did not justify treating the transactions as inter-State sales.

Issue (ii): Whether, for the assessment year 1996-97, the assessment could be sustained without a valid notice and opportunity under Section 7(3) of the U.P. Trade Tax Act read with Rule 41(8) of the rules framed thereunder.

Analysis: For the assessment year 1996-97, the assessment could be made on best judgment only if the assessing authority found the return incorrect or incomplete and afforded the dealer a reasonable opportunity to prove its correctness or completeness. The Court held that, in the absence of a proper defect in the return and without the requisite notice contemplated by Section 7(3) and Rule 41(8), the assessment machinery could not be invoked to disallow the returned position merely for want of compliance with Rule 4(4). In the statutory scheme of Section 9(2) of the Central Sales Tax Act, the State assessment powers applied, and the procedural safeguards under the State law had to be observed.

Conclusion: The assessment for the assessment year 1996-97 could not be sustained on the basis adopted by the authorities below.

Final Conclusion: The revisions succeeded, the adverse order of the Tribunal was set aside, and the matter went back for determination of tax liability in accordance with the findings recorded.

Ratio Decidendi: For proving inter-State transfer otherwise than by sale, Form-F declarations and evidence of dispatch satisfy Section 6-A, and a State rule that merely prescribes additional records is directory if it is inconsistent with the statutory method of proof; the dealer cannot be denied relief solely because the consignee may have misused the forms or because directory procedural requirements were not strictly followed.

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