1992 (4) TMI 223 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to "C" forms for procurement of goods for works contracts.
2. Alleged violation of Article 14 of the Constitution of India.
3. Compliance with the Central Sales Tax Act, 1956, and the Constitution (Forty-sixth Amendment) Act, 1982.

Summary:

I. Entitlement to "C" Forms for Procurement of Goods for Works Contracts:
- Petitioners' Claim: The petitioners sought a writ of mandamus directing the respondents to issue "C" forms u/r 12(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957, to procure materials for works contracts and to prevent penalization u/s 10-A of the Central Sales Tax Act, 1956.
- Respondents' Argument: The respondents contended that the petitioners, being registered dealers, could not use "C" forms for goods used in works contracts as the definition of "sale" in section 2(g) of the Central Sales Tax Act, 1956, did not change post the Constitution (Forty-sixth Amendment) Act.
- Court's Decision: The court held that petitioners are entitled to "C" forms for purchasing goods in inter-State trade for use in works contracts. The denial of "C" forms was found to be arbitrary and violative of Article 14 of the Constitution of India. The court directed the respondents to supply "C" forms as per the registration certificates.

II. Alleged Violation of Article 14 of the Constitution of India:
- Petitioners' Argument: The petitioners argued that the denial of "C" forms to contractors while allowing them to traditional traders was discriminatory and violative of Article 14 of the Constitution of India.
- Court's Decision: The court found that the denial of "C" forms to contractors was indeed arbitrary and violative of Article 14, as the distinction between dealers and contractors ceased to exist post the Constitution (Forty-sixth Amendment) Act.

III. Compliance with the Central Sales Tax Act, 1956, and the Constitution (Forty-sixth Amendment) Act, 1982:
- Petitioners' Argument: The petitioners contended that the Central Sales Tax Act, 1956, should be interpreted in light of the Constitution (Forty-sixth Amendment) Act, 1982, which included works contracts within the definition of "sale."
- Respondents' Argument: The respondents argued that without specific amendments to the Central Sales Tax Act, 1956, the petitioners could not use "C" forms for works contracts.
- Court's Decision: The court held that the definition of "sale" in the Central Sales Tax Act, 1956, is broad enough to include transactions involving works contracts post the Forty-sixth Amendment. The court quashed the impugned order and directed the issuance of "C" forms, while reserving the right of the respondents to take action u/s 10-A for any misuse.

Conclusion:
The court allowed the writ petitions to the extent of directing the respondents to issue "C" forms to the petitioners for procuring goods for works contracts, while preserving the respondents' right to take action for any misuse of the forms u/s 10-A of the Central Sales Tax Act, 1956. The court found the denial of "C" forms to be arbitrary and violative of Article 14 of the Constitution of India.