G.L. Oza, J.
1. This is a petition filed by the petitioner challenging the order of the Commissioner of Sales Tax passed in Revision Case No. 15/R (Central) of 1973-74 dated 20th June, 1974.
2. According to the petitioner, the petitioner is a partnership-firm registered under the Partnership Act and is a dealer in oil, oil-seeds, oilcakes, etc., in Sanyogitaganj, Indore. The petitioner is a registered dealer under the Central Sales Tax Act, 1956. This petition challenges an order pertaining to the assessment of the petitioner under the Central Sales Tax Act, 1956, for the assessment period beginning from 13th November, 1966, to 2nd November, 1967. It is alleged that, in the course of business, during the relevant period under assessment, the petitioner in the course of inter-State trade purchased from time to time groundnut oil-seeds worth in all Rs. 14,84,656 from dealers of Uttar Pradesh, Rajasthan and Punjab, who are registered dealers under the Central Sales Tax Act, and obtained from them certificates in form E-I. The selling dealers, according to the petitioner, were instructed to despatch the goods to Bombay and send the relevant railway receipts to the petitioner at Indore. The petitioner subsequently sold these goods to dealers in Bombay, who are registered under the Central Sales Tax Act, by transfer of these documents of title, the railway receipts, to those dealers against payment of price while the goods were still in transit.
3. According to the petitioner, under Section 6 of the Central Sales Tax Act, as it stood at the relevant time, the subsequent sales in the course of inter-State trade effected by transfer of documents of title when the goods were in transit are not liable to tax. According to the petitioner, the petitioner under Section 6 was only expected to submit form E-I as required under the Central Act to seek this exemption.
4. Under the Central Act, the Rules have been framed by the Central Government exercising powers under Sub-section (1) of Section 13, which are known as the Central Sales Tax (Registration and Turnover) Rules, 1957. In these Rules, Sub-rule (2) of Rule 12, which is renumbered as Sub-rule (4) by notification dated 4th November, 1968, provides that a certificate contemplated by the proviso to Sub-section (2) of Section 6 is a certificate in form E-I in the case of first subsequent sale and form E-II in the case of sales subsequent to the first subsequent sale.
5. Under the Central Act, the State Government also have framed the Rules and the State Government, exercising powers under Sub-section (3), Sub-section (4) and Sub-section (5) of Section 13 of the Central Sales Tax Act, have framed the Rules known as the Madhya Pradesh Sales Tax (Central) Rules, 1957. Rule 8-D provides that, in addition to the certificate in form E-I and form E-II, the dealer also must furnish a declaration in form C, before he seeks exemption under Section 6, Sub-section (2), of the Central Sales Tax Act.
6. According to the petitioner, he has submitted form E-I, as required under the Central Act and the Central Rules, but exemption is refused by the sales tax authorities for non-furnishing of the declaration in form C. According to the petitioner, during the course of assessment for the relevant period, i.e., 13th November, 1966, to 2nd November, 1967, the petitioner claimed exemption in respect of the turnover of oil-seeds amounting to Rs. 14,84,656, together with the turnover of Rs. 16,000, representing the price of gunny bags used as container for these goods, totalling Rs. 15,00,656, on the ground that the said turnover, being in respect of subsequent inter-State sales to registered dealers by transfer of documents of title while the goods were still in transit, was exempt from payment of sales tax under the Central Act, Section 6(2). The petitioner submitted the requisite form E-I obtained from the dealers from whom the goods were purchased. But the petitioner did not submit the form C in view of the earlier decision of the Board of Revenue in the petitioner's own case, and contended before the authorities that form C was not necessary. The assessing authority by order dated 27th November, 1972, levied sales tax at the rate of 3 per cent on the said turnover of oil-seeds of Rs. 14,84,656 and at the rate of 10 per cent on the turnover of Rs. 16,000, representing the sale of gunny bags.
7. Against this order, the petitioner went up in revision before the Commissioner of Sales Tax, Madhya Pradesh. During the pendency of this revision petition, the petitioner also obtained the necessary declaration in form C from the dealers, as required under Rule 8-D of the State Rules, framed under the Central Sales Tax Act, and filed an application dated 9th May, 1974, requesting the Commissioner for permission to produce the said declarations.
8. At the time of hearing of the revision petition, in addition to his contentions, the petitioner submitted that if, in the view of the Commissioner, the production of form C was obligatory, then, in the interests of justice, the assessment be set aside and the petitioner be permitted to produce form C, which he had obtained now. The Commissioner did not accept the prayer for production of form C, nor accepted the contentions advanced by the petitioner and rejected the revision petition by the order dated 20th June, 1974, and hence the present petition.
9. The Learned Counsel for the petitioner contended that under the Central Sales Tax Act, Section 6, Sub-section (2), provided exemption to the petitioner in the case of subsequent sales in the course of inter-State trade if the sales were effected to registered dealers outside the State by transfer of documents for price when the goods were still in transit and the Central Government, exercising their rule-framing powers, framed Rule 12(4), which provided that, for seeking such exemption, the petitioner should file the form in form E-I or E-II, as the case may be. Thus, the State Government, while exercising powers to frame Rules, could not frame a rule, which goes beyond the section itself. It was, therefore, contended that the provision contained in the State Rule 8-D is merely directory and not mandatory and, therefore, for non-compliance with this rule by not filing the C forms, exemption could not be refused. In support of this contention, the Learned Counsel placed reliance on the decisions reported in State of Madras v. P. Subbiah Pillai  20 S.T.C. 263, State of Gujarat v. Yakubbhai Hajihakumutdin & Co.  23 S.T.C. 117 and a decision of this Court reported in Commissioner of Sales Tax, M.P. v. Shivnarayan Jagatnarayan, Raigarh (1978) Vikraya Kar Nirnaya (11) 168.
10. The Learned Counsel for the respondents, on the other hand, contended that he does not want to contest the legal position that for non-compliance with Rule 8-D of the State Rules, by not filing the certificates in form C, exemption could not be refused, but attempted to contend that the non-filing of form C clearly indicates that the sales are not such which could be exempted under Section 6(2) of the Central Sales Tax Act, as, according to the Learned Counsel, these sales must be in accordance with the description of transactions mentioned in Section 8(3) of the Central Act.
11. The decisions of the assessing authority and the Commissioner in the revision clearly indicate that there is no finding of fact that the sales in question for which the exemption was sought were not such which fall within the description of sales under Section 8(3). The decisions clearly indicate that they are based on non-compliance with Rule 8-D of the State Rules under the Central Sales Tax Act, as the petitioner failed to produce the certificates in form C. This contention advanced by the learned Government Advocate appearing for the respondents, therefore, cannot be accepted. Section 6 of the Central Sales Tax Act, as it was at the relevant time, reads:
6. (1) Subject to the other provisions contained in this Act, every dealer shall, with effect from such date as the Central Government may, by notification in the official Gazette, appoint, not being earlier than thirty days from the date of such notification, be liable to pay tax under this Act on all sales effected by him in the course of inter-State trade or commerce during any year on and from the date so notified.
(2) Notwithstanding anything contained in Sub-section (1), where a sale in the course of inter-State trade or commerce of goods of the description referred to in Sub-section (3) of Section 8,--
(a) has occasioned the movement of such goods from one State to another; or
(b) has been effected by a transfer of documents of title to such goods during their movement from one State to another;
any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subject to tax under this Act:Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner a certificate duly filled and signed by the registered dealer from whom the goods were purchased, containing the prescribed particulars.
Sub-section (2), proviso, of this section provides that the assessee is expected to furnish to the authority in a prescribed manner a form signed by the registered dealer from whom the goods were purchased and Rule 12(2) of the Central Rules prescribes the manner in which this certificate could be obtained and this is what is provided in Rule 12(2) as forms E-I and E-II. Rule 8-D, as has been framed by the State Government, reads:
8-D. The exemption provided in Sub-section (2) of Section 6 of the Act shall not be granted unless the dealer making the sales referred to in Rules 8-B and 8-C, furnishes to his appropriate Sales Tax Officer the 'Original' of the declaration form C received from the registered dealer to whom he sold the goods together with the portion marked 'Original' of the certificate in form E-I or E-II, as the case may be.
This rule talks of a certificate in form C from the registered dealer to whom the goods are sold. Apparently, Section 6(2), proviso, does not call for such a certificate and, therefore, this rule provides something more than what is contemplated under Section 6(2) and, in this view of the matter, therefore, this rule goes beyond the scope of Section 6. It is well-settled that, while exercising the rule-making powers, the Government could not enact something more or put some more restriction than what is contemplated in the Act itself and, in this view of the matter, this rule, therefore, could not be read as mandatory, but could only be read as directory.
12. In State of Madras v. P. Subbiah Pillai (1967] 20 S.T.C. 263, a Division Bench of the Madras High Court considered a similar rule framed by the Madras Government under the Central Sales Tax Act in view of Section 6(2) of the Central Sales Tax Act and held:
As for Sub-rule (2) of that rule, what is stated for the State is that it is not invalid and that all that is intended by the requirement of production of a declaration in form C is that there should be proof that the second sales, for which exemption from tax is claimed, were to registered dealers. If that is the intention, the sub-rule is innocuous. It cannot, in any sense, be read as mandatory. It should be understood only as one mode of proof of the fact that the second sales are to registered dealers. But the revenue cannot insist that the dealer is bound to produce declarations in form C in order to qualify himself for exemption. All that the revenue can require the dealer to do is to prove that the second sales were to registered dealers and the proof may take any form, not necessarily declarations in form C. While, therefore, we do not think that Sub-rule (2) is invalid, the sub-rule understood as being merely directory, we make it clear that the revenue cannot rely on non-production of declarations in form C and merely on that ground deny exemption to the dealer to which he is entitled by Section 6(2).
This decision of the Madras High Court was relied on by the Gujarat High Court in State of Gujarat v. Yakubbhai Hajihakumutdin & Co.  23 S.T.C. 117 In this decision, a rule framed by the Gujarat State requiring form C for claiming exemption under Section 6(2) of the Central Sales Tax Act was considered. Their Lordships observed:
Mr. Mody in this connection also rightly relied upon the decision of the Madras High Court in State of Madras v. P. Subbiah Pillai 20S.T.C. 263 by the Division Bench, consisting of Veeraswami and Ramaprasada Rao, JJ. It was held that, in order to get exemption under Section 6(2), in respect of second inter-State sales to a registered dealer by transfer of documents of title during movement of goods, the only condition required by the proviso to Section 6(2) was that the assessee should produce certificate in form E-I obtained from the registered dealer from whom the goods were purchased. There was no indication either in Section 6(2) or the proviso thereto that C forms as such should be obtained and produced. It was, therefore, held that even if the rule had provided that the exemption under Section 6(2) would be given only if a certificate in form C was produced, the rule would be ultra vires. All that the revenue could require the dealer to do was to prove that the second sales were to registered dealers and the proof might take any form, not necessarily declarations in form C. We are in agreement with the said view.
Apparently, therefore, the requirement under Rule 8-D for production of the C forms could not be said to be mandatory and the petitioner could not be denied exemption merely on that ground. In Commissioner of Sales Tax, M.P. v. Shivnarayan Jagatnarayan, Raigarh (1978) Vikraya Kar Nirnaya (11) 168, a Division Bench of this Court also took the same view. It is, therefore, apparent that in the orders of the assessing authority as well as that of the Commissioner of Sales Tax exercising revisional jurisdiction, there is an apparent error on the face of the record.
12A. The petition is, therefore, allowed. The orders passed by the authorities referred to above are hereby quashed. In the light of the concession made by the Learned Counsel for the respondents about the legal position, the parties are directed to bear their own costs. The amount of the security deposit shall be refunded to the petitioner, after verification.