Form C cannot be withheld on pre-assessment of sale character; refusal is limited to statutory eligibility conditions.

Form C cannot be refused at the threshold on a merits inquiry into whether the transaction was pre-decided, intra-State, or otherwise capable of later misuse; the issuing authority's scrutiny is confined to statutory eligibility. The Jharkhand HC stated that denial is permissible only where the applicant is not a registered dealer, the goods are not covered by the registration certificate, the prescribed fee is unpaid, or the applicable rules are breached. Mere common-State location of dealer and consignee, consignee naming, or mismatch between road permit and invoice value are not lawful grounds for withholding the form. The refusal was therefore held unsustainable, and the applications were to be considered afresh in accordance with law.

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Issues: Whether declaration in Form C could be refused at the threshold on the ground that the transaction was allegedly pre-decided or intra-State in nature, or because the consignee and dealer were located in the same State, or because of mismatch between road permit particulars and invoice value; and what are the permissible grounds for denial of Form C.

Analysis: The statutory scheme under Section 8 of the Central Sales Tax Act, 1956 and Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 shows that Form C is required to enable a registered dealer to claim the concessional treatment available for inter-State purchases of goods covered by the certificate of registration. The authority issuing Form C is not empowered to conduct a merits inquiry into whether the transaction ultimately falls under Section 3(a) or Section 3(b), whether there was a pre-existing contract of sale, or whether the form may later be misused. Such questions are reserved for assessment and for action under the penal provisions of the Act if misuse is established. The Court found that mere narration of goods to a dealer, the presence of the petitioner's name as consignee, the fact that dealer and purchaser are in the same State, and a difference between the road permit value and the dealer's invoice value are not lawful grounds to withhold Form C. The power to deny the form is narrow and can be exercised only where the applicant is not a registered dealer, the goods are not covered by the registration certificate, the prescribed fee has not been paid, or there is violation of the applicable Jharkhand rules.

Conclusion: The refusal to generate or supply Form C on the stated grounds was unsustainable, and the respondent-State was directed to consider and dispose of the petitioner's applications in accordance with law and the Court's observations within two months.

Ratio Decidendi: Form C cannot be denied on a pre-assessment determination of the nature of the transaction, because the issuing authority's scrutiny is confined to statutory eligibility conditions and not to adjudication of inter-State sale character or possible misuse.

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