TaxTMI 
TaxTMI 
2004 (12) TMI 372
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.... of "form C" marked as duplicate and the indemnity bonds furnished by the appellant for the loss of portions of form C marked as original. 2.. The assessing authority has disallowed the benefit of concessional rate of tax corresponding to duplicate C forms filed on the ground that the appellant did not file original of the C forms issued by the purchasing dealers for the inter-State sales effected by the appellant. The main contention before the authorities was with regard to non-consideration of duplicate portion of C forms filed in support of the claim for benefit of concessional rate of tax under section 8(2)(a) of the Central Sales Tax Act, 1956. The appellant challenged the order of the Deputy Commissioner of Commercial Taxes, Bangalore, on various grounds before the Joint Commissioner of Commercial Taxes, Bangalore. The Joint Commissioner for the reasons recorded in his order was of the opinion that the assessing authorities should not have rejected the duplicate portion of the C forms and the indemnity bonds filed by the appellant and should not have denied the benefit of concessional rate of tax on such turnover covered by duplicate C forms. The assessing authority ....
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....s Tax Act, 1956 (Central Act). (2) In any event, filing of the "Original" portion of the C form is not mandatory, but directory; and, filing "Duplicate" part thereof is sufficient compliance for levy of lower rate of tax under rule 12(1) of the Central Rules read with rule 6(b)(ii) of the State Rules and section 8 of the Central Act. [Manganese Ore (India) Ltd. v. Commissioner of Sales Tax, Madhya Pradesh [1991] 83 STC 116 (MP), paras 10 and 13] In the alternative (3) Where the portion marked "Original" of the C form is lost and the selling dealer furnishes the indemnity bond together with the portion marked "Duplicate" of the C form, which would be the best secondary evidence of the lost counterpart of the original C form, the same should be accepted as sufficient compliance of the alternative requirement of rule 12(2) and (3) of the Central Rules and rule 6(b)(ii) of the State Rules for the levy of tax at 4 per cent under sub-section (1) read with sub-sections (1) and (4) of section 8 of the Central Act. Justification for the alternative proposition: (a) When lower rate of 4 per cent tax would be admissible on production of additional duplicate of the C form with the prescri....
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....s at the time of hearing: (a) That the High Court has failed to note that the fact of bona fides of the loss of original portion of the statutory form is not disputed and as such rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957 is not applicable; (b) the bona fides of the appellant in the matter of loss of original portion of the C forms is not in dispute and also when the bona fides of the efforts made by the appellant to obtain duplicate C forms from its customers in terms of rule 12(3) of the Central Rules which proved to be only marginally successful is also not in dispute, the view of the High Court that even in such a situation the appellant is not entitled to concessional rate of tax on the basis of the duplicate portion of the C form is inequitable and works great hardship on the appellant; (c) the appellant has collected only the lower rate of tax from its customers and has paid the same to the Government: the High Court ought to have been less rigid in interpreting rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957; (d) section 8(4) or rule 12(1) does not say which part of the form was required to be filed before the assessing authority. It ....
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....tion 62 primary evidence of the Evidence Act, it is submitted that where a number of documents are made by a uniform process, namely, printing, photocopy, cyclostyle they are not copies in the legal sense of the term and that they are of counterpart originals and each is primary evidence of the contents of the rest but only secondary evidence of the common original. 6.. Mr. Sanjay R. Hegde, learned counsel appearing for the respondent, submitted that the order passed by the High Court does not call for any interference and no case is also made out by the appellant for such interference. 7.. In the above background, the High Court was called upon to answer the question as to whether the appellant is entitled to claim concessional rate of tax without complying with the requirement contemplated under rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957. The High Court answered it in the negative and in favour of the Revenue. The assessee is in appeal before us. 8.. The provisions of law involved in the present matter are as under: "8. Rate of tax on sales in the course of inter-State trade or commerce.-(1) Every dealer, who in the course of inter-State trade or commerce,....
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....n the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any Rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in the telecommunications network or in mining or in the generation or distribution of electricity or any other form of power; (c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c). (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled and signed by the registered dealer to whom the goods are so....
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....The declaration and the certificate referred to in sub- section (4) of section 8 shall be in forms C and D respectively: Provided that form C in force before the commencement of the Central Sales Tax (Registration and Turnover) (Amendment) Rules 1974, or before the commencement of the Central Sales Tax (Registration and Turnover) (Amendment) Rules, 1976, may also be used up to the 31st December 1979 with suitable modifications: ............... Provided further that a single declaration may cover all trans- actions of sale, which take place in one financial year between the same two dealers. Provided also......... (2) Where a blank or duly completed form of declaration is lost, whether such loss occurs while it is in the custody of the purchasing dealer or in transit to the selling dealer, the purchasing dealer shall furnish in respect of every such form so lost an indemnity bond in form G to the notified authority from whom the said form was obtained, for such sum as the said authority may having regard to the circumstances of the case, fix. Such indemnity bond shall be furnished by the selling dealer to the notified authority of his State if a duly completed form of declaratio....
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....to the selling dealer. ............... (b)(i) The procedure for advance payment of tax shall be the same as that prescribed by the rules framed under the Karnataka Sales Tax Act, 1957, and for this purpose, every dealer shall submit every month, to the assessing authority, a statement in the form prescribed by the Rules framed under the Karnataka Sales Tax Act, 1957, and it shall be accompanied by a receipt from a Government treasury or crossed postal order or crossed cheque or crossed demand draft in favour of the assessing authority for the amount of the tax paid in advance. (ii) A registered dealer who claims to have made a sale to another registered dealer or to Government shall, in respect of such claim, attach to his return to be filled in form IV the portion marked 'original' of the declaration or the certificate in form D, received by him from the purchasing dealer or Government, as the case may be. The assessing authority may, in his discretion, also, direct the selling dealer to produce for inspection the portion marked 'duplicate' of the declaration or certificate in form D, as the case may be. ............... (d) Every declaration for....
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....isions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner. Rule 8(4)(a) also provides that a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. On the above provision, a registered dealer will not be entitled to the concessional rate of tax in respect of inter-State sales made by him without the production of the declaration referred under clause (a) of sub-section (4) noted above. 13.. Under the Central Sales Tax (Karnataka) Rules, 1957, the dealer is required to submit along with his return the original of the prescribed forms. As could be seen from the rule extracted above a registered dealer who claims that he has made a sale to another registered dealer is required to attach the original of the declaration forms on the certificate in the prescribed form received by him from the prescribed dealer along with his return filed by him. We have already extracted section 13 of the Central Sales Tax Act, which ....
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....are of the view that rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957 which provides for furnishing of the original C form in order to claim the concessional rate of tax is consistent with the provisions of the Central Sales Tax Act and there is no conflict between the provisions of rule 12(2) and (3) of the Central Sales Tax Rules and rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957 as contended by the appellant. Rule 12 of the Rules is intended to prevent misuse of C forms by unscrupulous and mischievous dealers and makes it obligatory for the dealer to furnish indemnity bond. In other words, in order to claim concessional rate of tax, the original C form has to be attached to the return as provided under rule 6(b)(ii) of the Central Sales Tax (Karnataka) Rules, 1957. It is not a mere formality or technicality but it is intended to achieve the object of preventing the forms being misused for the commission of fraud and collusion with a view to evade payment of taxes. In our opinion, rule 6(b)(ii) which is clear and categoric cannot be liberally construed but it should be construed strictly. We, therefore, hold that without producing the original of the....
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....ng of declaration forms issued by the purchasing dealers was a condition for claiming the exemption thereunder. This Court held as under: "Section 5(2)(a)(ii) of the Act in effect exempts a specified turn- over of a dealer from sales tax. The provision prescribing the exemption shall, therefore, be strictly construed. The substantive clause gives the exemption and the proviso qualifies the substantive clause. In effect the proviso says that part of the turnover of the selling dealer covered by the terms of sub-clause (ii) will be exempted pro- vided a declaration in the form prescribed is furnished. To put it in other words, a dealer cannot get the exemption unless he furnishes the declaration in the prescribed form. It is well-settled that 'the effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it.'............... There is an understandable reason for the stringency of the provisions. The object of section 5(2)(a)(ii) of the Act and the rules made thereunder is self-evident. While they a....
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....of these rules and regulations is that before a selling dealer is able to claim the benefit of concessional tax he should be able to produce the original and duplicate issued to him by the purchasing dealer in the first instance or the duplicate which will also contain these two portions of the forms issued along with a declaration subscribed to by the purchasing dealer subsequently on the strength of his earlier records and his personal knowledge and for which he will have to count in due course to the sales tax authorities from whom he obtained these declarations. The bench was of the opinion that the production of the photostat copy of the counter-foil cannot be said to be strict or even substantial compliance of rule 12(3) and that by merely producing the photostat copy of the counter-foil, it cannot be said that the Act and the Rules have been complied with. 22.. The case of Manganese Ore (India) Ltd. v. Commissioner of Sales Tax, Madhya Pradesh [1991] 83 STC 116 (MP) was relied on by learned counsel for the appellant. In the above case, in order to obtain the benefit of section 8(1) of the Central Sales Tax Act, it was argued before the High Court that form C consists of thr....
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....declarations, as required by rule 12(3). Since it did not, in the face of the clear language of the rule, its case can hardly be said to be a hard case. The judgment cited by the learned counsel has no application because that was a case where the language of the statute was found to be ambiguous. The language of the provision here is clear and was rightly applied by the High Court." 25.. The learned Senior Counsel for the appellant submitted that there is no suggestion anywhere that there is anything wrong with the genuineness of the transaction or any doubts as to the pos- session by the purchasing dealer on a certificate enabling the sellers to obtain the concessional rate of tax under section 8 of the Act. Under such circumstances, the authorities should not have taken the strict view in rejecting the claim of the concessional rate of tax. At first sight, the argument of the learned counsel for the appellant appears to be genuine and acceptable but considering the mandatory nature of the provisions of the Act and Rules, this Court is called upon to decide the questions involved in this case. The provisions being mandatory they should have been complied with. The appellant made....