Cancellation of valid Form C exceeded rule-making power, preserving concessional sales tax benefit under the parent Act.

Rule 17(20) of the Central Sales Tax (Rajasthan) Rules, 1957 was examined for consistency with the Central Sales Tax Act, 1956, particularly the limited rule-making power under Section 13(3) and Section 13(4)(e). The Court noted that the Act does not expressly authorise cancellation of a declaration Form C once validly issued, and that a subordinate rule cannot retrospectively nullify a form issued under the statutory scheme. On that basis, the rule was held to exceed the enabling provision and be inconsistent with the Act, so the consequential cancellation communications were quashed and the purchaser's concessional benefit under Section 8 was preserved.

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Issues: Whether Rule 17(20) of the Central Sales Tax (Rajasthan) Rules, 1957, authorising cancellation of validly issued declaration Form C on the grounds stated therein, was within the State's rule-making power under the Central Sales Tax Act, 1956, and whether the consequential cancellation of the C Forms and related communications could be sustained.

Analysis: The rule-making power under Section 13(3) of the Central Sales Tax Act, 1956, is subject to consistency with the Act and the Central Rules, while Section 13(4)(e) permits rules only regarding the authority, conditions, fees, custody, maintenance of records, and manner of use and furnishing of prescribed forms and declarations. The Act contains no express power enabling the State to cancel a declaration form once validly issued. The Court held that the impugned rule travelled beyond the enabling provision and was inconsistent with the statutory scheme. A validly issued Form C cannot be retrospectively nullified by a subordinate rule where the parent Act does not confer such power, particularly when the purchasing dealer acted on the basis of the registration and forms as they existed on the transaction date.

Conclusion: Rule 17(20) was held ultra vires the Central Sales Tax Act, 1956, and the communications and cancellation order issued in consequence were quashed. The petitioner was held entitled to the concessional benefit under Section 8 of the Central Sales Tax Act, 1956.

Ratio Decidendi: A subordinate rule cannot authorize cancellation of a validly issued statutory declaration form unless such power is traceable to the parent Act, and a purchasing dealer who has acted on the strength of a registration or declaration valid on the date of transaction cannot be deprived of the statutory benefit by retrospective cancellation.

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