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Issues: (i) Whether the denial of Form F could be upheld on the basis of outstanding tax demands and absence of stay in respect of several assessment years. (ii) Whether Rule 5(4)(ii) of the Central Sales Tax (Delhi) Rules, 2005 was ultra vires the Central Sales Tax Act, 1956.
Issue (i): Whether the denial of Form F could be upheld on the basis of outstanding tax demands and absence of stay in respect of several assessment years.
Analysis: The application concerned issuance of Form F for interstate stock transfers. The record showed that the applicant had pending tax demands for multiple years, and while some demands were under challenge or subject to limited restraint, several others had no stay in operation. The Court held that it could not assume the outcome of pending statutory proceedings or treat the restraint order in a few years and on a specific issue as automatically extending to other years and other liabilities. In that situation, the existence of outstanding dues furnished a valid basis for refusing the forms.
Conclusion: The denial of Form F on the basis of pending and unstayed demands was upheld, against the petitioner.
Issue (ii): Whether Rule 5(4)(ii) of the Central Sales Tax (Delhi) Rules, 2005 was ultra vires the Central Sales Tax Act, 1956.
Analysis: The State Government's rule-making power under Section 13 of the Central Sales Tax Act, 1956 expressly extends to prescribing the authority, conditions, and manner for obtaining statutory forms, including declaration forms. On that basis, the Court found that the impugned rule could not, at the interim stage, be said to travel beyond the enabling Act. The Court also noted that the respondents had subsequently passed a reasoned order after affording the applicant the requisite opportunity, so the procedural objection did not assist the applicant in the present proceedings.
Conclusion: Rule 5(4)(ii) was not held to be ultra vires, against the petitioner.
Final Conclusion: The interim relief sought would have virtually granted the final relief in the main petition, and no case for interference was made out at this stage.
Ratio Decidendi: Where the enabling statute authorises the State Government to prescribe conditions for obtaining declaration forms, the authority may withhold such forms for outstanding assessed tax dues, provided the applicant is given a hearing and reasons are recorded in writing.
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