Statutory C form obligation under the Central Sales Tax Act cannot be defeated by silence in the contract.

A statutory tax dispute under the Central Sales Tax Act, 1956 can be pursued in writ jurisdiction despite an arbitration clause where the controversy concerns a statutory obligation rather than mere contractual performance, and part of the cause of action arises within the forum territory. The court treated issuance of C forms as part of the statutory mechanism for concessional tax on inter-State sales, governed by sections 8(1), 8(4) and rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957. It held that the purchaser's entitlement to the concessional rate cannot be defeated by silence in the contract, and the respondent's refusal to cooperate in issuing the forms was unsustainable.

---

---

Issues: (i) whether the writ petition was maintainable despite the arbitration clause in the contract and the objection based on territorial jurisdiction; (ii) whether the respondent was statutorily bound to issue C forms to enable the petitioner to avail the concessional rate of tax under the Central Sales Tax Act, 1956.

Issue (i): whether the writ petition was maintainable despite the arbitration clause in the contract and the objection based on territorial jurisdiction

Analysis: The dispute related not merely to contractual performance but to a statutory tax obligation arising under the Central Sales Tax Act, 1956. A matter governed by tax law, where the statute creates its own hierarchy of authorities, is not displaced by a contractual arbitration clause. The Court also held that part of the cause of action arose within Arunachal Pradesh because the goods were dispatched and the works were executed there, attracting jurisdiction under Article 226 of the Constitution of India.

Conclusion: The writ petition was maintainable and the territorial objection failed.

Issue (ii): whether the respondent was statutorily bound to issue C forms to enable the petitioner to avail the concessional rate of tax under the Central Sales Tax Act, 1956

Analysis: Section 8(1) and section 8(4) of the Central Sales Tax Act, 1956, together with rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, show that issuance and furnishing of C forms is part of the statutory mechanism for availing concessional tax on inter-State sales. The purchaser cannot defeat that statutory benefit merely because the contract does not expressly mention C forms. The respondent's prior correspondence and assurances reinforced the statutory duty to cooperate in issuance of the forms.

Conclusion: The respondent was bound to issue the C forms, and its refusal was unsustainable.

Final Conclusion: The petition succeeded on the statutory tax issue, the refusal to issue C forms was quashed, and a direction was issued to furnish the required forms to the petitioner.

Ratio Decidendi: Where a taxing statute creates a specific statutory mechanism for concessional treatment of inter-State sales, the purchasing dealer's obligation to furnish the prescribed declaration form cannot be defeated by silence in the contract, and a writ court may entertain the challenge notwithstanding an arbitration clause when the dispute substantially concerns statutory liability.

---