1970 (5) TMI 67 - HC - VAT and Sales Tax

Summary

Issues: Validity of sub-rule (11) of rule 12 of the Central Sales Tax (Orissa) Rules in light of the Central Sales Tax Act, 1956.

In this judgment by the Orissa High Court, the validity of sub-rule (11) of rule 12 of the Central Sales Tax (Orissa) Rules was challenged as being ultra vires the provisions of the Central Sales Tax Act, 1956. The sub-rule required that for claiming a concessional rate of tax under the Act, a declaration form issued only by the notified authority of the State where the goods are taken delivery of in the course of inter-State trade or commerce shall be accepted. The court examined the relevant provisions of the Act, including Section 3 which defines inter-State trade or commerce, and Section 8 which outlines the conditions for tax liability and the requirement of a declaration form (form C) from the purchasing dealer to avail concessional rates. The court held that the impugned sub-rule imposed an additional obligation beyond what was prescribed in Section 8(4) of the Act, rendering it inconsistent with the Act. An example was provided to illustrate how the sub-rule could conflict with the Act in a practical scenario. Consequently, the court declared sub-rule (11) of rule 12 as ultra vires.

Furthermore, the judgment highlighted that under Section 13(3) of the Act, the State Government has the authority to make rules to carry out the purpose of the Act as long as they are not inconsistent with the Act itself. Since the impugned sub-rule was found to be inconsistent with Section 8(4) of the Act, it was deemed ultra vires and thus, the court directed the State Government not to enforce the rule. The application was allowed, and a writ of mandamus was issued accordingly. The judgment concluded with no order as to costs, and the concurring opinion of Justice Acharya was noted.