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Commissioner of Sales Tax Vs. C.L. Sharma - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number Miscellaneous Civil Case No. 52 of 1968
Judge
Reported in1969MPLJ275; [1969]23STC442(MP)
AppellantCommissioner of Sales Tax
RespondentC.L. Sharma
Appellant Advocate Rama Gupta, Government Adv.
Respondent Advocate C.P. Sen and ; P.C. Naik, Advs.
Excerpt:
- - (iv) where a blank or duly completed and signed declaration form or the form of certificate is lost in transit or from the custody of the selling dealer, he shall obtain a duplicate form from the purchasing dealer or department of any state or central government as the case may be to whom he sold the goods and in case of his failure to do so his sale in question shall not be treated as falling under sub-section (1) of section 8 of the act. no other duplicate form can be utilised for the purpose as is abundantly clear from the language of clause (iv), which provides that in case of his failure to obtain the duplicate as provided in that clause, his sale in question shall not be treated as falling under sub-section (1) of section 8 of the act......selling dealer, to claim the benefit of section 8(1) of the act, has to furnish the portion of the form marked 'original' to the assessing authority, who may also direct the dealer to produce the portion marked 'duplicate' for inspection. this requirement is prescribed by sub-rule (2) of rule 8 and it is to be noticed that the portion of the form 'c marked 'duplicate' is not to be produced in place of the portion marked 'original', but it is to be produced in addition to the 'original' if so required by the assessing authority. in case of loss by the selling dealer of the form 'c supplied by the purchasing dealer, the requirements of clauses (iii), (iv) and (v) of sub-rule (5-a) of rule 8 have to be complied with. clause (iii) provides that the selling dealer shall furnish security by.....
Judgment:

G.P. Singh, J.

1. This is a case stated by the Sales Tax Appellate Tribunal referring for our answer the following question of law :

Whether on the facts and circumstances of the case the acceptance of the duplicate 'C Forms produced for the reason that the originals were lost not legal and proper ?

2. The case relates to the assessment for the period 9th November, 1961, to 28th October, 1962, of one C. L. Sharma, who is a registered dealer under the Central Sales Tax Act, 1956. For a certain part of his turnover the dealer claimed that he should be assessed at the reduced rate of tax specified in Section 8(1)(b) of the Act, as the sales were made in the course of inter-State trade or commerce to a registered dealer. To bring his case under this provision, he produced declaration in 'C Forms signed by the purchasing dealer as required by Section 8(4) of the Act. Eight of the declarations produced by the assessee were not portions of the 'C Forms marked 'original' but portions marked 'duplicate'. The dealer could not produce the portions marked 'original' as they were lost. The assessing authority rejected these 'duplicates' and held that the sales covered by these declarations did not qualify for the benefit of reduced rate of tax under Section 8(1)(b) of the Act. The order of the assessing authority was maintained by the Appellate Assistant Commissioner in first appeal, but in second appeal the Tribunal admitted the portions of the 'C Forms marked 'duplicate' and held that the sales covered by them should also be assessed under Section 8(1)(b) of the Act. On an application made by the Commissioner of Sales Tax, the question of law that we have already set out was referred to us.

3. As provided in Section 8(4) of the Act, the benefit of Section 8(1) is not available in respect of 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 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. Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, prescribes the form of declaration which is Form 'C. This form consists of three portions which are separately marked as 'counterfoil', 'duplicate' and 'original'. The manner in which these forms are to be used and produced is prescribed by Rule 8 of the Madhya Pradesh Sales Tax (Central) Rules, 1957. 'Sub-rules (1)(a), (2) and (5-A) (i) to (v) of Rule 8 which are relevant for our purpose read as follows :

(1)(a) A registered dealer, who wishes to purchase goods from another such dealer on payment of tax at the rate applicable under the Act to sales of goods by one registered dealer to another, for the purpose specified in the purchasing dealer's certificate of registration, shall obtain from the authority mentioned in Sub-rule (1) or any other officer as may be authorised by the Commissioner in this behalf, blank declaration form in Form 'C as prescribed under Sub-rule (1) of Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, for furnishing it to the selling dealer. Before furnishing the declaration to the selling dealer, the purchasing dealer, or any responsible person authorised by him in this behalf, shall fill in all required particulars in the form, and shall also affix his usual signature in the space provided in the form for this purpose. Thereafter, the counterfoil of the form shall be retained by the purchasing dealer and the other two portions marked 'original' and 'duplicate' shall be made over by him to the selling dealer.'

'(2) A registered dealer who claims to have made a sale to another registered dealer or to the Government shall, in respect of such claim, at any time before the assessment, furnish to the assessing authority to whom he has furnished a return in Form V, the portion marked 'original' of the declaration or certificate received by him from the purchasing dealer or the Government, as the case may be. He shall also maintain a register in Forms VI-A and VI-B for declarations and certificates respectively, showing serially and chronologically the receipt of the declarations and certificates from the purchasing dealer or the Government. These registers shall be open for inspection by any officer of the Sales Tax Department not below the rank of the Sales Tax Officer or any other officer authorised by a Sales Tax Officer in this behalf and he may also verify the declaration forms and certificates kept in custody of the selling dealer. The assessing authority may, in its discretion, also direct the selling dealer to produce for inspection, the portion of the declaration or certificate marked 'duplicate'. '

'(5-A) (i) Where a declaration form either blank or duly completed and signed by the purchasing dealer, is lost while it is in his custody before despatch or lost in transit after it has been despatched to the selling dealer, the purchasing dealer, besides taking action prescribed under Sub-rule (5), furnish to the said authority, from whom the said form was obtained, a reasonable security by way of an indemnity bond, separately for each form so lost, against any possible misuse of the said form.

(ii) Where a form of certificate duly completed and signed by the authorised officer is lost, the authorised officer shall inform the nearest Sales Tax Officer about the contents of the certificate. The Sales Tax Officer receiving such a report shall arrange to publish in the Official Gazette the particulars of the certificate in respect of which the report is received.

(iii) Where a blank or duly completed and signed declaration form furnished by the purchasing dealer is lost from the custody of the selling dealer, the latter shall in the manner specified in Clause (i) furnish a security by way of an indemnity bond in respect of the declaration form to the authority to whom he is required to furnish his returns in Form V.

(iv) Where a blank or duly completed and signed declaration form or the form of certificate is lost in transit or from the custody of the selling dealer, he shall obtain a duplicate form from the purchasing dealer or department of any State or Central Government as the case may be to whom he sold the goods and in case of his failure to do so his sale in question shall not be treated as falling under Sub-section (1) of Section 8 of the Act.

(v) The purchasing dealer or any responsible person authorised by him under Sub-rule (1) of Rule 8 or any officer of any State or Central Government duly authorised in this behalf, who issues any duplicate form to the selling dealer as required by Clause (iv), shall give the declaration in Form VII-A in red ink across the page on all the three parts of the duplicate declaration form or form of the certificate duly signed by him.

4. According to the scheme of these rules, the purchasing dealer retains the portions of the 'C Form which is marked 'counterfoil' and delivers to the selling dealer the portions marked 'original' and 'duplicate'. The selling dealer, to claim the benefit of Section 8(1) of the Act, has to furnish the portion of the form marked 'original' to the assessing authority, who may also direct the dealer to produce the portion marked 'duplicate' for inspection. This requirement is prescribed by Sub-rule (2) of Rule 8 and it is to be noticed that the portion of the Form 'C marked 'duplicate' is not to be produced in place of the portion marked 'original', but it is to be produced in addition to the 'original' if so required by the assessing authority. In case of loss by the selling dealer of the Form 'C supplied by the purchasing dealer, the requirements of Clauses (iii), (iv) and (v) of Sub-rule (5-A) of Rule 8 have to be complied with. Clause (iii) provides that the selling dealer shall furnish security by way of an indemnity bond to the assessing authority in respect of the declaration form that is lost. Clause (iv) requires him to obtain a duplicate form from the purchasing dealer and it is this duplicate form which is to be produced before the assessing authority. The duplicate referred to in Clause (iv) is not the portion of the form which is marked 'duplicate', but the duplicate which the purchasing dealer has to supply under Clause (v). This duplicate is again Form 'C in three portions, viz., 'counterfoil', 'duplicate' and 'original', with an additional declaration in Form No. VII-A in red ink across the page on all the three portions of Form 'C. Thus, when the selling dealer applies to the purchasing dealer for a duplicate form in respect of one, that may have been lost by him, the purchasing dealer has again to fill in and sign Form 'C in three portions and has further to give a declaration in Form No. VII-A in red ink across the page on all the three portions of Form 'C. He will retain the portion marked 'counterfoil' and give to the selling dealer the portions marked 'duplicate' and 'original'. This is the duplicate form which the selling dealer can utilise for production before the assessing authority in case of loss of the form initially supplied by the purchasing dealer. No other duplicate form can be utilised for the purpose as is abundantly clear from the language of Clause (iv), which provides that in case of his failure to obtain the duplicate as provided in that clause, 'his sale in question shall not be treated as falling under Sub-section (1) of Section 8 of the Act.' The duplicate form referred to in Clause (iv) is the duplicate which the purchasing dealer is required to furnish under Clause (v) and this alone can be used by the selling dealer for purpose of claiming the benefit of Section 8(1) of the Act in case of loss of the form initially supplied by the purchasing dealer. The portion marked duplicate of Form 'C which may have been supplied in the first instance by the purchasing dealer cannot be utilised in case the portion marked 'original' is lost, because that is not the duplicate to which reference is made in Clauses (iv) and (v). The selling dealer must again obtain from the purchasing dealer the duplicate Form 'C under Clauses (iv) and (v) and furnish 'original' portion of it to the assessing authority and be ready to produce the 'duplicate' portion of this duplicate form for inspection if so required. We have gone through the record of this case and we find that the duplicates that were produced by the dealer were not duplicates as contemplated by Clauses (iv) and (v), but were the portions marked 'duplicate' of Forms 'C which were supplied in the first instance by the purchasing dealer and of which portions marked 'original' were said to have been lost. The dealer was not entitled to the benefit of the concessional rate of tax under Section 8(1) of the Act on the basis of the duplicates that he produced. However, as there has been some confusion in this respect, in the interest of justice, he may be given opportunity to produce the duplicates as contemplated by Clauses (iv) and (v) of Sub-rule (5-A) of Rule 8.

5. For the reasons stated above, our answer to the question is that the duplicate 'C' Forms can be accepted in case of loss of the originals provided the duplicates are those which are referred to in Clauses (iv) and (v) of Sub-rule (5-A) of Rule 8 of the Madhya Pradesh Sales Tax (Central) Rules. In the instant case, the duplicates that were accepted were not which were obtained under Clauses (iv) and (v) and their acceptance was not legal and proper. There will be no order as to costs of this reference.


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