Narayana Pai, J.
1. The common question raised in all these writ petitions relates to the validity of rule 39-A added to the Mysore Sales Tax Rules in November 1962.
2. The petitioners in all these cases deal in hides and skins. These are declared goods within the meaning of the Central Sales Tax Act and are liable to single point levy of tax under the Mysore Sales Tax Act, in accordance with the provisions of sub-section (4) of section 5 of the said State Act.
3. Because the goods are declared goods, as of importance from the point of view of inter-State trade, tax thereon payable under the Central Act as well as several State Acts is controlled by the provisions of section 15 of the Central Sales Tax Act. That section reads as follows :-
'15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. - Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of, a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely :-
(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent. of the sale or purchase price thereof, and such tax shall not be levied at more than one stage;
(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State.'
4. In the light of the provisions of clause (a) tax leviable at the point of first purchase in respect of these goods under section 5(4) of the Mysore Act is limited to two per cent. The mandate of clause (b) of section 15 of the Central Act was given effect in the Mysore Sales Tax Act by the addition of a proviso to sub-section (4) of section 5 in the following terms :-
'Provided that where tax has been paid in respect of sale or purchase of any of the declared goods under this sub-section and such goods are subsequently sold in the course of inter-State trade or commerce, the tax paid under this Act shall be refunded to the dealer on production of proof that the subsequent sale has been subjected to the tax under Central Sales Tax Act, 1956.'
This was done by the amending Act 32 of 1958 with effect from 1st January, 1959. We should have stated earlier that section 15 of the Central Sales Tax Act was for the first time brought into force as from 1st October, 1958.
5. The said proviso was later substituted by a slightly differently worded proviso by the amending Act 29 of 1961 which came into force on 7th December, 1961. The altered proviso which is the one that is now in force is as follows :-
'Provided that where tax has been paid in respect of sale or purchase of any of the declared goods under this sub-section and such goods are subsequently sold in the course of inter-State trade or commerce, the tax paid under this Act shall be refunded to such person in such manner and subject to such conditions as may be prescribed.'
6. The prescription contemplated by the the proviso was made by rule 39-A. That rule reads as follows :-
'39-A. Refund of tax in the case of certain types of sales of declared goods. - (1) The tax levied under sub-section (4) of section 5 in respect of the sale or purchase inside the State of any goods specified therein shall, if such goods are sold in the course of inter-State trade or commerce, be refunded in the manner and subject to the conditions prescribed in this rule to the dealer who has made the inter-State sale and has paid tax under the Central Sales Tax Act, 1956 (Central Act 74 of 1956), in respect of such sale.
(2) Every such dealer who claims a refund under the rule, shall, within the time allowed in sub-rule (3), submit to the assessing authority a statement in Form 4-A.
(3) The statement referred to in sub-rule (2) shall be submitted so as to reach the assessing authority not later than the date on which the return of turnover of the period in respect of the sale in the course of inter-State trade or commerce referred to in sub-rule (1) is due.
Provided that in respect of any period prior to the publication of this rule, the statement referred to in sub-rule (2) shall be submitted to the assessing authority within a period of three months from the date of publication of this rule in the Official Gazette, if the due date for the submission of the return of turnover for the said period has already elapsed.
(4) The burden of proving the claim preferred shall be on the dealer.
(5) On receipt of the statement in Form 4-A, the assessing authority shall, if it is satisfied after such scrutiny of the accounts and after such enquiry as he considers necessary that the claim is admissible, pass an order refunding the tax.
(6) If the statement submitted appears to the assessing authority to be incorrect, incomplete or otherwise not in order, it shall, after making such enquiry as it considers necessary and after giving the dealer an opportunity of being heard, pass such orders thereon as it thinks fit.'
7. The principal argument about the validity or effectiveness of this rule as well as to some extent the proviso itself is that whereas the condition prescribed as condition precedent by section 15(b) of the Central Sales Tax Act for a person to become entitled to receive refund of State tax paid by him in the sale of goods in the course of inter-State trade, rule 39-A has proceeded beyond that and imposed an additional condition precedent by stating that the assessee claiming refund much have paid tax under the Central Sales Tax Act in respect of such sale.
8. There is a subsidiary argument relating to the proviso appended to sub-rule (3) of rule 39-A and the effect of Form 4-A prescribed for application for refund.
9. On a plain reading of section 15(b) of the Central Act, there is no doubt whatever that the right to receive refund of State tax, if any, paid in respect of declared goods is acquired the moment the said goods are sold in the course of inter-State trade. Actual payment of tax under the Central Sales Tax Act in respect of the said sale is neither specifically mentioned in the section nor is it, in our opinion, capable of being implied in the language of the section. It has no doubt been argued that we must read this section against what is described as the object of the Central Sales Tax Act in the light of the provisions of Article 286 of the Constitution of India; the object is said to be that in respect of certain goods regarded as of considerable importance in respect of inter-State trade or commerce, there should not be double taxation, but that such goods should attract tax either under the Central Act or under a State Act. Although in the light of what may be regarded as legislative history, such statement may not be regarded as wholly unwarranted, we do not think that full effect can be given to the argument in the manner contemplated by the counsel on behalf of the State. No better answer thereto is necessary than what their Lordships of the Supreme Court have stated to be the effect and the manner of working of the scheme of charge under the Central Sales Tax Act in the case reported in The State of Mysore v. Yaddalam Lakshminarasimhiah Setty & Sons ( 16 S.T.C. 231 as p. 239). Their Lordships pointed out that the charge under section 6 of the Act is itself made subject to other provisions contained in the Act and that operation of such other provisions - such as for example proviso appended to sub-section (1) of section 8 - may be to reduce the tax payable under the Central Act to nil. Hence, no question of avoidance of double tax could be relied upon as the only indicator of the object of the statute. The object as we understand it is that in respect of goods which are of importance to inter-State trade, any State law imposing tax on the transactions of sale or purchase, must be subject to such restrictions as the Parliament may prescribe and those restrictions at present are the ones found in section 15 of the Central Sales Tax Act.
10. Hence, the simple question is one of merely ascertaining the meaning of the language employed in the said section without any predilection or suggestion derivable from what different people may regard as the object of the statute.
11. As we have already stated, we have no doubt that the one and the only condition for the refund of the State tax is that the goods should have been sold in the course of inter-State trade. To say further, as sub-rule (1) of the impugned rule 39-A says, that the assessee claiming refund must have paid tax under the Central Sales Tax Act in respect of such sale, is to add a further condition precedent to the acquisition of right to refund itself. Such a result cannot be achieved in exercise of the powers given to prescribe conditions subject to which the refund may be claimed. Such conditions to be valid, must be conditions which do not add to the condition precedent to the acquisition of right to refund, but may deal with such matters as form of application, time of application, mode of proof, etc.
12. Applying this test, the following words appearing at the end of sub-rule (1) of rule 39-A must be regarded as beyond the scope of rule-making power traceable to section 15(b) of the Central Sales Tax Act :-
'..... and has paid tax under the Central Sales Tax Act, 1956 (Central Act 74 of 1956), in respect of such sale.'
13. As to the rest of the rule, we do not think that criticism of such a nature as to strike down any portion thereof as ultra vires is possible.
14. Sub-rule (3) prescribes the period of limitation. To the extent it does so, it is not contended that it is beyond the power of prescribing conditions subject to which refund may be claimed. But the attack is directed towards the proviso which it is stated purports to give retrospective effect to the rule. We do not think the proviso should necessarily be read in that way. Because, till this rule was framed there was no period of limitation at all prescribed for applying for refund or obtaining refund, as right to refund may be still alive when the rule came into force and because other portion of the rule prescribes what may be regarded as a rule of procedure, it must according to ordinary notions of interpretation be held to apply at the time when the right is sought to be enforced. Even otherwise the proviso having worked itself out long ago, it can scarcely be said to furnish any ground of attack to the petitioners at present.
15. The argument in relation to Form 4-A is that it throughout regards State tax as having been actually paid and that therefore the same remains to be refunded and further among the particulars required by it are a statement of 'State tax paid under section 5(4) of the State Act' and a statement of 'Central sales tax paid in respect of turnover relating to inter-State transactions'. It was pointed that because the application for refund in Form 4-A is required by sub-rule (3) of rule 39-A to be presented along with the return for purpose of the Central Sales Tax Act, no question of tax actually paid at that point of time can be said to arise, and because the period is more or less the same as the period relevant to the presentation of the return under the State Act also, no question of any State tax already paid can be said to arise either. We do not think however that such a position should necessarily result, because in the second proviso appended to rule 18(1)(b) and sub-rule (2) of rule 21 of the Mysore Sales Tax Rules, tax as calculated by the assessee or admitted to be due, has to be paid along with the return. Nevertheless it is argued that the tax so paid on an assessment may not be the actual tax as assessed ultimately by the officer. In such a case, there may not be tax actually paid, at any rate, on turnover in respect of which tax had not been paid. If such a situation should arise, it appears to us that the proper view to take is that as the necessity for actual payment is followed by a statutory claim for refund, the assessing authority should either make an adjustment in calculation or regard so much of the turnover assessable under section 5(4) of the State Act as is subject of refund under section 15(b) of Central Act, is not amenable to the said levy. In any event a form cannot be depended upon to invalidate a rule or the provision of the statue. The normal and well understood principle is that all form should be read as intended to give effect to the relevant rule or statutory provisions and are also liable to modification or alteration to suit the circumstances of the case in question.
16. The only result of this discussion is that the following words occurring at the end of sub-rule (1) of the rule 39-A are liable to be and are hereby struck down as ultra vires :-
'... and has paid tax under the Central Sales Tax Act, 1956 (Central Act 74 of 1956), in respect of such sale.'
For the same reason the following words occurring at the end of the proviso to sub-section (4) of section 5 as it stood before the substitution thereof by amending Act 29 of 1961, must also be held to have been ineffective and inoperative for the period during which the said proviso was in force, that is, from 1st January, 1959 to 7th December, 1961 :-
'... on production of proof that the subsequent sale has been subjected to the tax under the Central Sales Tax Act, 1956 ....'
17. Having thus disposed of the only point of law raised in these writ petitions, we now proceed to deal with the facts.
18. In the two writ petitions Nos. 1007 and 1008 of 1966 the position was as follows : In respect of the year ended 31st December, 1961, and the year ended 31st December, 1962, respectively, the petitioner who had paid Central sales tax was asked to pay a certain sum as balance due by him as and for Mysore sales tax after adjusting Central tax paid by him to Mysore tax payable by him. Now because the goods sought to be assessed under section 5(4) of the Mysore Act had been sold in the course of inter-State trade, no tax at all was payable by him under the Mysore Act. Central tax though at one time thought to be leviable is no longer exigible in view of the ruling of the Supreme Court in Yaddalam Lakshminarasimhiah's case ( 16 S.T.C. 231) already cited. Hence, in the light of our decision, the Central sales tax adjusted by the assessing authority as against the State tax will have to be refunded to the petitioner and the demand made for balance tax due be waived, if the assessing authority finds that the petitioner has complied with the other conditions prescribed under rule 39-A to the extent they may be applicable in respect of the periods concerned.
19. For these reasons the demands made in each of these writ petitions for payment of what is described as balance tax due under the Mysore Sales Tax Act are quashed and the original assessing authority is directed to examine the facts afresh in the light of the law as declared in this order and proceed to pass such order as may be correct and just in the circumstances of the cases. There should however be and there will be a separate order in each of these cases directing refund of Central sales tax collected which becomes immediately refundable in view of the decision of the Supreme Court.
20. In the other four writ petitions Nos. 2463, 2464, 2465 and 2466 of 1966, which refer to different periods, the position on facts is similar.
21. But before dealing with them, we should record that the Government Pleader has taken notice on behalf of not only the State Government but also the two assessing authorities impleaded as first and second respondents, because the point involved is the same as in other cases and may be dealt with conveniently at one hearing.
22. In all these four matters, the Central sales tax paid by the assessee has not been adjusted, but a separate demand made for payment of Mysore sales tax under sub-section (4) of section 5.
23. Hence the proper order to make in each of these cases is the following and we order accordingly :-
The assessing authority is directed to refund Central sales tax paid by the petitioner in each of these cases. He is further directed to examine the facts of these cases in the light of the law declared in this order from the point of view of whether the petitioner is entitled to receive refund of Mysore sales tax and/or examine the liability, if any, of the petitioner for payment of Mysore sales tax. To enable him to do so, the demand already made for payment of Mysore sales tax in each of these cases is quashed.
24. No costs in any of these petitions.
25. Ordered accordingly.