1970 (1) TMI 70 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Applicability of concessional tax rate under Section 8(1) of the Central Sales Tax Act.
2. Requirement and implications of furnishing 'C' form under Section 8(4) of the Central Sales Tax Act.
3. Interpretation of Rule 10-A of the Central Sales Tax (Andhra Pradesh) Rules, 1957.
4. Hardship due to non-compliance with mandatory provisions.

Issue-wise Detailed Analysis:

1. Applicability of Concessional Tax Rate under Section 8(1) of the Central Sales Tax Act:
The core issue revolves around whether the assessee is entitled to a concessional tax rate of 1% under Section 8(1) of the Central Sales Tax Act for an inter-State sale of groundnut oil. The assessee claimed the sale was genuine and supported by invoices and account books. However, the crucial point was whether the necessary 'C' form was produced to validate the concessional rate.

2. Requirement and Implications of Furnishing 'C' Form under Section 8(4) of the Central Sales Tax Act:
Section 8(4) mandates that for a sale to qualify for the concessional rate under Section 8(1), the selling dealer must furnish a 'C' form, duly filled and signed by the purchasing dealer, to the prescribed authority. The language of Section 8(4) is "express, explicit and mandatory." Non-compliance with this requirement results in the sale being taxed at the higher rate of 7% under Section 8(2)(b). The court emphasized that the 'C' form must be filed before the Commercial Tax Officer, and filing it before appellate authorities post-assessment does not suffice.

3. Interpretation of Rule 10-A of the Central Sales Tax (Andhra Pradesh) Rules, 1957:
Rule 10-A outlines the procedure if a 'C' form is lost. If lost while in the custody of the purchasing dealer or in transit, the purchasing dealer must furnish an indemnity bond. If lost in the custody of the selling dealer, he must also furnish an indemnity bond. If lost in transit or from the custody of the selling dealer, a duplicate 'C' form must be obtained with a declaration in red ink. The court noted that the assessee did not comply with these provisions, as no duplicate 'C' form was obtained or furnished.

4. Hardship Due to Non-Compliance with Mandatory Provisions:
The court acknowledged the hardship that the strict compliance might cause to honest dealers who lose 'C' forms due to accidents or circumstances beyond their control. However, it emphasized that the provisions of Section 8(4) and Rule 10-A are clear and unambiguous, and it is not within the court's purview to soften their rigour. The court referenced the Supreme Court's observations in Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer, which highlighted that such provisions aim to prevent fraud and ensure administrative efficiency.

Conclusion:
The court concluded that since the assessee did not produce the 'C' form before the Commercial Tax Officer, the benefit of the concessional tax rate under Section 8(1) could not be granted. The Sales Tax Appellate Tribunal erred in directing taxation at a lower rate based on an indemnity bond. The revision petition was allowed, and the order of the Assistant Commissioner of Commercial Taxes, which upheld the Commercial Tax Officer's decision to tax the turnover at 7%, was restored. The assessee was ordered to pay the costs to the Government, with an advocate's fee of Rs. 100.