Form C verification and prior assessment govern concessional tax benefit; later obsolescence and pre-assessment demands were rejected.

A selling dealer's duty under the Central Sales Tax framework is limited to verifying that the purchasing dealer is registered and that Form C contains the prescribed particulars; no broader duty of investigation arises. A later cancellation or asserted obsolescence of Form C does not, by itself, defeat concessional CST already earned for completed inter-State sales where the statutory requirements were met at the time of sale. Recovery under the Assam VAT scheme cannot proceed through demand notices issued before any lawful assessment or determination. On that basis, the notices were held unsustainable and quashed, and the dealer's concessional tax benefit for the relevant transactions was upheld.

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Issues: (i) the extent of the selling dealer's responsibility in verifying a Form C issued by the purchasing dealer; (ii) whether subsequent cancellation or obsolescence of Form C could defeat the concessional tax benefit already availed; (iii) whether the impugned notices could be treated as valid demand notices without any prior assessment; and (iv) whether the notices were liable to be quashed.

Issue (i): the extent of the selling dealer's responsibility in verifying a Form C issued by the purchasing dealer.

Analysis: Section 8(1) and Section 8(4) of the Central Sales Tax Act, 1956, read with Rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957, require the selling dealer to furnish a duly completed declaration in Form C issued by the registered purchasing dealer to obtain concessional tax. The selling dealer is expected to verify that the purchaser is a registered dealer and that the goods and particulars correspond with the certificate and declaration. No further duty is cast on the seller to investigate matters beyond the declaration and registration particulars supplied by the purchaser.

Conclusion: the selling dealer's obligation is confined to verifying the purchaser's registration and the prescribed particulars in Form C, and the petitioner satisfied that requirement.

Issue (ii): whether subsequent cancellation or obsolescence of Form C could defeat the concessional tax benefit already availed.

Analysis: The concession under Section 8 is earned when the statutory requirements are met at the time of the inter-State sale and when the declaration is furnished. Later cancellation or a subsequent communication that the form has become obsolete does not, by itself, divest the selling dealer of the benefit already accrued for transactions completed earlier. A purchaser and seller acting on a valid registration and declaration cannot be penalised for a later administrative change, especially when the record does not show a legally effective retrospective cancellation of the declaration for the relevant period.

Conclusion: the later cancellation or asserted obsolescence of Form C did not take away the petitioner's right to concessional tax for the transactions in question.

Issue (iii): whether the impugned notices could be treated as valid demand notices without any prior assessment.

Analysis: Section 43 of the Assam Value Added Tax Act, 2003 contemplates recovery only after tax is assessed, levied, or otherwise determined in the manner known to law, and the notice of demand operates after assessment. The scheme recognises the distinction between levy, assessment, and collection. The materials showed that no assessment proceedings were initiated or completed before the notices were issued, and therefore the notices could not be sustained as lawful demand notices or as a valid step in recovery proceedings.

Conclusion: the impugned notices were issued without the prerequisite assessment and were not sustainable as demand notices.

Issue (iv): whether the notices were liable to be quashed.

Analysis: The impugned notices proceeded on the erroneous assumption that the Form C had been declared obsolete for the relevant period and demanded differential tax without a proper adjudicatory exercise. Since the petitioner had furnished Form C for inter-State sales to a registered dealer and no assessment had preceded recovery, the notices suffered from legal infirmity and lacked authority.

Conclusion: the impugned notices were set aside and quashed.

Final Conclusion: the petitioner was held entitled to the concessional CST benefit for the relevant inter-State sales, and the recovery demands founded on the impugned notices could not survive in law.

Ratio Decidendi: a selling dealer who furnishes a valid Form C for an inter-State sale to a registered dealer cannot be denied concessional tax benefit on the basis of a later cancellation or obsolescence of that form, and no recovery demand can be issued without a prior lawful assessment.

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