TaxTMI 
TaxTMI 
TaxTMI 
1996 (4) TMI 405
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....tral Sales Tax Act, 1956. The respondents-assessees are manufacturers and/or dealers in edible oils and stainless steel sheets. the relevant years, they effected a large number of inter-State sales to various dealers in Bombay and Gujarat. They obtained C forms from the purchasing dealers and submitted them in their assessment proceedings. On survey and inquiry, it was found that many of the C forms were either not valid or not genuine. Some of them were found to have been issued to dealers other than the respondents. Accordingly, anti-evasion proceedings were commenced against the respondents. Notices were issued calling upon them to show cause why additional tax and penalty be not levied and recovered from them. It is at that stage that the respondents approached the Rajasthan High Court by way of writ petitions contending that since the inter-State sales effected by them are covered by the exemption notifications dated December 26, 1986/April 17, 1990 and because the said notifications do not require the production of a C form as a condition for availing the exemption provided thereby, they were under no obligation to produce the same and no action can be taken against them for....
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....ermit." Sub-section (5) confers upon the State Government the power of exemption. The power of exemption can be exercised both with reference to dealers as well as with reference to goods. The exemption can be granted either wholly or partially and subject to such conditions as may be imposed in that behalf. Sub-section (5) reads as follows: "(5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the official Gazette, and subject to such conditions as may be specified therein, direct,- (a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter-State trade or commerce, from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in sub- section (1) or sub-section (2) as may be mentioned in the notification; (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, whi....
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....furnished by the selling dealer-assessee to his assessing authority. The Rules made under the Act prescribe the forms in which the aforesaid declaration and certificate, as the case may be, has to be issued by the purchasing dealer/Government. In the case of Government it is called D form (certificate) and in the case of registered dealers it is called C form (declaration)-vide rule 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957. We shall refer to the contents of C form alone. The C form prescribed by the Rules is titled "Form C-Form of Declaration". These forms are supplied by the appropriate authority under the Act to the purchasing registered dealers. If this form, containing all the relevant particulars is issued by the purchasing dealer to the selling dealer, the latter will collect tax (pass on tax) from the purchasing dealer only at the rate prescribed in section 8(1); otherwise, he will collect tax at the higher rate, as may be applicable, prescribed by section 8(2). The purchasing dealer must furnish all the particulars required by the said declaration/form. They include (1) name of the issuing State, office of issue, date of issue, name of the pur....
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....rsession of Finance Department Notification No. F.2(8) FD/Gr. IV/75-15, dated July 1, 1975, the State Government being satisfied that it is necessary so to do in the public interest hereby directs with immediate effect that the tax payable under sub-section (1) of the said section by any dealer, having his place of business in the course of inter-State trade or commerce, of all edible oils excluding (1) hydrogenated oils (including "vanaspati"), (2) palm oil whether refined or not, and (3) refined coconut oil shall be calculated at the lower rate, as in clause (a) below, on the condition, namely: (a) 1½ per cent where the assessing authority satisfied that oil-seeds purchased for the manufacture of such oil have been subjected to tax in accordance with section 5C of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act 29 of 1954), or 2½ per cent where the assessing authority is satisfied that oil-seeds purchased for the manufacture of such oil have been subjected to tax in accordance with section 5CC of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act 29 of 1954); (b) Claim regarding partial exemption under Finance Department Notification No. F.4(72) FD/Gr. IV/81-18, Ma....
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....es tax will be charged at the rate of 1½ per cent; in case the oil-seeds purchased for the manufacture of such oil have been subjected to tax under section 5CC of the Rajasthan Act then the rate of tax leviable on the inter-State sale of edible oils would be 2½ per cent. There is yet another condition mentioned in clause (b) of the said notification with which we are not concerned in these appeals and hence is not being referred to by us. The notification dated April 17, 1990 was issued in supersession of the aforementioned notification. This notification too exempts inter-State sales of all edible oils excluding certain oils mentioned therein. As against the tax payable at the rate of 4 per cent under section 8(1), the notification prescribes a single rate of 1½ per cent provided the two conditions mentioned therein are satisfied. The first condition is that the dealer proves to the satisfaction of the assessing authority that the oil-seeds used in the manufacture of such edible oil have already suffered tax under the Act at the rate of 3 per cent within the State of Rajasthan. We need not refer to the second condition since we are not concerned with it in ....
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....conceive of the said notifications independent of, or apart from section 8(1). They merely reduce the rate in section 8(1) as already mentioned. One must first satisfy the condition in section 8(4) to become eligible for the concessional rate in section 8(1). It is only thereafter that he can claim the benefit of the said notifications, for which purpose again he has to satisfy the conditions prescribed in the notifications. It is therefore wrong to think that section 8(5) or the notifications are self-contained and operate de hors the other provisions of the Act/Rules. The Division Bench has unfortunately failed to appreciate the notifications in their correct perspective. We are of the opinion that the judgment under appeal is unsustainable in law and it is accordingly set aside. The learned single Judge was right in dismissing the writ petitions. So far as the merits are concerned, viz., the validity and genuineness of C forms produced by the dealers, we express no opinion. That is a matter to be gone into by the appropriate authorities under the Act in the proceedings which are yet to be concluded. We are unable to see how the decision of this Court in McDowell and Co. Ltd. v....