CST Notification 588 (E) dt.16.09.2005

[Rangarajan DV]

Wtih the quarterly issue of C forms made mandatory w.e.f. Oct-2005, most of the dealers are facing problem is obtaining C form from buying dealers based on invoice date. Due to transportation of goods from South to North or North to South, obviously it gets into the next quarter of the same Financial year or the next financial year. 

The buying dealers submit forms based on receipt of goods, and including the sale bills in the next quarter or next financial year. This causes problem in assessment of the selling dealer and the assessing authority imposes higher rate of tax stating that a "Single C form should not cover invoices of more than one Quarter" and accordingly completes the assessment.

Though a third proviso to Rule 12(1) clearly states “Provided also that where, in the case of any transaction of sale, the delivery, of goods is spread over to different quarters in a financial year or of different financial years, it shall be necessary to furnish a separate declaration or certificate in respect of goods delivered in each quarter of a financial year”, the buying dealers take a different view and refuse to correct the form based on the invoice date and include the same in the relevant quarter form. 

Can some clarification on how this is been addressed in other States or any clarification from State Sales tax authorities been published for public interest, to avoid litigation.  Please clarify.

Thank you, Best Regards

AI Summary

Transfer of property governs C form timing; issuance depends on when title to goods passes, not invoice date.
C form entitlement arises only upon a completed inter state sale, the crucial date for issuance being when transfer of property in goods occurs and title passes to the buyer. Determination of that date is a question of fact to be decided by contract terms and parties' intentions. Rule 12(1) third proviso requires separate declarations when deliveries span different quarters, so mismatches between seller invoice dates and buyer receipt dates can produce assessment disputes; sellers should secure purchaser cooperation and documentary proof of title passage.