C Form access cannot be denied for unpaid self-assessed VAT absent statutory authority

A registered dealer could not be denied generation of C forms merely because self-assessed VAT for the relevant period remained unpaid. The Central Sales Tax Act and the applicable rules did not make payment of such VAT a condition precedent for obtaining or generating C forms, and an administrative circular could not add a new statutory disability or override the rule-making scheme. The refusal therefore amounted to an unlawful executive restriction and could not be sustained. The authorities were required to permit generation of C forms if the other statutory conditions were satisfied.

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Issues: Whether the authorities could refuse to allow generation of C forms to a registered dealer solely because the dealer had not paid its self-assessed VAT liability for the relevant period.

Analysis: The statutory scheme under the Central Sales Tax Act permits a reduced rate of tax on inter-State sales when the purchasing dealer furnishes the prescribed declaration in Form C. The Act and the relevant rules governing declarations did not prescribe unpaid VAT dues as a condition precedent for obtaining or generating C forms. The State relied only on an administrative circular which introduced a condition requiring payment of self-assessed tax before access to the online C-form facility. Such a restriction operated as a mode of tax recovery, but executive instructions could not create a new statutory disability or substitute for rule-making under the Act. In the absence of a statutory rule authorising this pre-condition, the refusal to permit generation of C forms could not be sustained.

Conclusion: The refusal to allow generation of C forms on the ground of non-payment of self-assessed VAT was illegal and unsustainable; the authorities were required to permit generation of C forms if the other conditions were satisfied.

Ratio Decidendi: A statutory benefit linked to issuance of C forms cannot be denied on the basis of an executive circular unless the disqualification is supported by the parent Act or validly framed rules.

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