1970 (3) TMI 122 - HC - VAT and Sales Tax

Summary

Issues:
Validity of declaration dated 13th August, 1960 under Central Sales Tax Act, 1956 - Interpretation of rules regarding filing of declarations and their attachment to returns - Ultra vires of rule 12(10) and rule 6(a)(ii) proviso of Central Sales Tax (Orissa) Rules, 1957.

Analysis:
The case involved a dispute over the validity of a declaration dated 13th August, 1960 under the Central Sales Tax Act, 1956. The petitioner, a registered dealer, sought a concessional tax rate based on this declaration. The assessing authorities and the Tribunal rejected the declaration, leading to the matter being brought before the High Court. The key issue was whether the declaration could be treated as valid and whether the rules regarding its filing and attachment to returns were ultra vires.

The High Court first addressed the validity of rule 12(10), concluding that it was ultra vires based on a previous decision. The Court held that declarations need not be attached to returns and can be filed within a reasonable time before assessment. This decision set the precedent for the acceptance of declarations even at the appellate stage with sufficient explanation.

Next, the Court examined the validity of rule 6(a)(ii) proviso. The petitioner argued that this rule exceeded the State Government's rule-making power under the Act. Citing a Supreme Court decision, the Court held that the rule was ultra vires as it restricted a dealer from giving one declaration covering transactions exceeding Rs. 5,000. The Court emphasized that a dealer could provide a single declaration for transactions above this value.

Regarding the specific facts of the case, the Court noted that the deliveries were made after the acceptance of the offer, not necessarily after the purchase order. The Court clarified that the form 'C' did not dictate the timing of deliveries in relation to purchase orders. The Court highlighted that the law did not mandate deliveries post-purchase order for declaration utilization.

In conclusion, the Court held that the purchase order covered various sales in the relevant quarter, rule 12(10) was ultra vires, and the proviso to rule 6(a)(ii) was also ultra vires. The Court reframed the questions posed, emphasizing that the declaration should not be ignored due to transactions exceeding Rs. 5,000 and that non-filing of the declaration with the return should not lead to rejection. The Court allowed the reference and the writ application, declaring the rule 6(a)(ii) proviso as ultra vires.

In summary, the judgment clarified the interpretation of rules under the Central Sales Tax Act, 1956, and emphasized the importance of valid declarations for tax assessment purposes while establishing the boundaries of rule-making powers under the Act.