State C Form rules cannot defeat concessional inter-State sales tax where the purchaser complies with its own State's requirements.

A State rule on C Forms under the Central Sales Tax regime binds only dealers within that State and cannot be used to defeat concessional tax treatment for inter-State sales by imposing a procedural requirement on purchasers in another State. The Madras rule requiring a separate C Form for each sale transaction was held inapplicable to purchasing dealers in Punjab, because the relevant statutory scheme required compliance with the Act and the rules governing the purchaser's own State. Where the assessee furnished C Forms in the manner required by the Act and the Punjab rules, the concessional rate of tax could not be denied.

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Issues: Whether the Madras rule requiring a separate C Form for each sale transaction applied to registered purchasing dealers in Punjab so as to deny the assessee the concessional rate of tax on inter-State sales.

Analysis: The statutory scheme under the Central Sales Tax Act and the rules framed thereunder contemplated that the purchasing dealer in his own State would obtain and furnish the prescribed declaration in C Form to the selling dealer. Rule 10(1) of the Madras rules, by its language and setting, was directed to registered purchasing dealers in Madras and could not be enforced against purchasers in Punjab or other States. The Madras selling dealer could not compel out-of-State purchasers to comply with a Madras procedural requirement, especially when the relevant Punjab rules did not insist on a separate declaration for each sale. The Court also found no intrinsic administrative necessity for insisting on a separate form for every transaction, and noted that the rule itself contemplated one form where sales did not exceed a specified amount, indicating that consolidation in one form was not objectionable in principle.

Conclusion: The Madras rule could not be relied upon to deny the concessional rate where the assessee had furnished C Forms in the manner required by the Act and the applicable Punjab rules; the assessee was entitled to the lower rate of assessment.

Ratio Decidendi: A State rule governing the form and manner of obtaining or furnishing declaration forms under the Central Sales Tax regime binds only the dealers within that State's jurisdiction and cannot be used to disallow statutory concessional treatment for inter-State sales when the selling dealer has complied with the Act and the rules applicable to the purchasing dealer in his own State.

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