1981 (1) TMI 228 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to concessional rate of tax u/s 8 of the Central Sales Tax Act.
2. Compliance with rule 12(3) of the Central Sales Tax (Registration and Turnover) Rules, 1957.
3. Acceptance of photostat copies of C forms as valid documentation.

Summary:

1. Entitlement to Concessional Rate of Tax u/s 8 of the Central Sales Tax Act:
The selling dealer, M/s. Delhi Automobiles (P.) Ltd., claimed a concessional rate of tax for the sale of 12 trucks to M/s. Tosh Metal and Alloy Industries (P.) Ltd. The claim was initially rejected due to the non-production of relevant C forms. The case was later confined to 8 transactions involving a turnover of Rs. 2,41,555.68, for which photostat copies of C forms were produced.

2. Compliance with Rule 12(3) of the Central Sales Tax (Registration and Turnover) Rules, 1957:
The Additional District Judge accepted the photostat copies of the counterfoils of the C forms as sufficient compliance with rule 12(3) and directed the petitioner-company to furnish an indemnity bond. However, the High Court emphasized that strict compliance with rule 12(3) is mandatory, as supported by the Supreme Court's decision in Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer. The rule requires the production of original or duplicate declaration forms with a declaration in red ink, which was not met by merely producing photostat copies.

3. Acceptance of Photostat Copies of C Forms as Valid Documentation:
The High Court rejected the argument that photostat copies of the counterfoils are equivalent to the original or duplicate forms. The court highlighted the importance of the stringent provisions in the Central Sales Tax (Delhi) Rules to prevent fraud and ensure administrative efficiency. The court concluded that the production of photostat copies does not constitute strict or substantial compliance with rule 12(3) and thus does not entitle the assessee to the concessional rate of tax.

Conclusion:
The High Court answered the reference in the negative, stating that the assessee was not entitled to the concessional rate of taxation u/s 8(1) for the turnover of Rs. 2,41,555.68. The reference was answered accordingly, with no order as to costs.