Refusal to issue statutory C declaration forms for inter-State sales despite no tax arrears, denial set aside

The dominant issue was whether the tax authority could refuse issuance of statutory C declaration forms despite the dealer's regular tax payment and absence of arrears. The HC held that denial was unsustainable because there was no allegation of tax short-payment or suppression/misstatement of goods, and at the stage of issuing C forms the notified authority is not required to enquire into the nature or purpose of the underlying inter-State transactions; any verification as to proper use and consequential liability must be undertaken separately under the applicable sales tax law. The respondents were consequently directed to issue the C declaration forms, and the writ petition was disposed of accordingly.

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Issues:
Petitioner seeks mandamus for issuance of 'C' declaration forms under Central Sales Tax Act, 1956 and related rules.

Analysis:
The petitioner, a limited company engaged in infrastructure development, requested the issuance of 17 'C' forms for the financial years 2016-17 and 2017-18 to avail the concessional tax rate of 2% for goods procured from other states. Despite regular tax payments and no arrears, the forms were not issued, prompting the writ petition. The respondent cited a circular withdrawing online access to 'C' forms, requiring manual application through jurisdictional officers. The court found the respondent's explanation insufficient, noting no tax discrepancies or misstatements by the petitioner.

The court referenced a previous ruling stating that authorities need not investigate the purpose of 'C' form usage at the issuance stage. It emphasized verifying the dealer's registration, goods inclusion in the registration certificate, and payment proof. Citing precedents from other High Courts, the court directed the respondents to issue the requested 'C' forms within fifteen days for the specified period, aligning with established legal principles.

In conclusion, the court granted the relief sought by the petitioner, emphasizing the binding nature of legal precedents and directing the issuance of 'C' forms. The judgment resolved the matter, with pending applications closed and no costs imposed on either party.

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