Set-off under eligibility certificate cannot be denied merely for non-production of Form C/D in inter-State sales.

Non-production of Form C/D for inter-State sales was not, by itself, a valid ground to deny set-off of the higher tax rate within the limits of an eligibility certificate under Section 4-A of the U.P. Trade Tax Act, 1948. The Court applied its earlier Division Bench ruling that upheld the validity of the amendment to Section 8(5) of the Central Sales Tax Act, 1956, but held that the resulting higher tax liability from missing Form C/D could not be used to refuse the statutory set-off, provided the prescribed ceiling conditions were satisfied.

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Issues: Whether non-production of Form C/D could be taken as a ground to deny set-off of the higher rate of tax from the limits prescribed in the eligibility certificate under Section 4-A of the U.P. Trade Tax Act, 1948.

Analysis: The revision concerned assessment year 2004-05 and turned on the effect of non-production of Form C against inter-State sales for claiming concessional treatment under the eligibility certificate. The Court treated the issue as covered by the earlier Division Bench ruling, which held that while the amendment to Section 8(5) of the Central Sales Tax Act, 1956 was valid, the higher rate of tax payable because of non-production of Form C/D could not, by itself, be used to deny set-off within the limits of the eligibility certificate under Section 4-A of the U.P. Trade Tax Act, 1948, subject to the prescribed ceiling conditions.

Conclusion: Non-production of Form C/D was not a valid ground to deny the set-off claimed by the assessee.

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