Form C/D non-production limits concessional rate, but higher tax may still qualify for eligibility-certificate set-off.

Non-production of Form C/D may justify denial of the concessional rate on inter-State sales, but the higher tax paid for that reason cannot be excluded from the tax benefit available under the eligibility certificate where the relevant monetary and other conditions are met. The Court followed its earlier ruling that the dealer may lose the reduced rate, yet remains entitled to set-off of the additional tax paid solely because the concessional documents were not produced. The assessment order was therefore required to be modified to allow that set-off.

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Issues: Whether the higher tax paid on inter-State sales for want of Form C/D could be denied set-off against the monetary limit under the eligibility certificate and whether the assessment order, to that extent, required modification.

Analysis: The claim for set-off turned on the effect of the amended provisions governing concessional rate of tax on inter-State sales and the consequence of non-production of Form C/D. The Court followed its earlier decision holding that non-production of Form C/D may disentitle the dealer to the reduced rate of tax, but the higher tax paid for that reason cannot be excluded from the tax benefit available under the eligibility certificate, so long as the relevant monetary and other conditions are satisfied.

Conclusion: The Court held that the petitioner was entitled to set-off of the higher tax amount denied merely on the basis of rate of tax, and the assessment order was liable to be modified to that extent.

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