C forms and tax rate determination must follow the nature of goods before applying a higher assessment rate.

Non-production of 'C' forms does not, by itself, justify assessment at the higher rate where the assessee claims the goods fall under a scheduled entry attracting 4% tax. The authorities were required to determine the true nature of the goods and the applicable tax rate before fastening liability at 14.5%, because 'C' forms are relevant only where exemption is claimed. As that enquiry was not properly made, the assessment and appellate orders were set aside and the matter was remanded for fresh assessment after hearing the assessee.

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Issues: Whether the assessee was liable to be assessed at 14.5% solely for non-production of 'C' forms when the goods were claimed to have been taxed under the relevant schedule at 4%.

Analysis: The assessment orders proceeded on the premise that non-furnishing of 'C' forms automatically attracted tax at 14.5%. The record, however, showed that the assessee's case was that the goods sold were hand gloves falling under the scheduled entry attracting 4% tax and that no exemption was being claimed on the basis of 'C' forms. Since 'C' forms are relevant where exemption is claimed, the authorities were required to examine the nature of the goods and the applicable rate of tax before fastening liability at the higher rate. That aspect was not properly considered by the authorities below.

Conclusion: The assessment and the appellate orders were set aside and the matter was remanded for fresh assessment after giving the assessee an opportunity of hearing.

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