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TMI Blog1968 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... san and R. Gopalakrishnan, for the respondent. G. Ramanujam and A.V. Rangam, for the appellant. -------------------------------------------------- The judgment of the Court was delivered by SHAH, J.- M/s. R. Nand Lal and Company-hereinafter called "the assessees"-are dealers in wool at Vaniyambadi in North Arcot District In the State of Madras. In proceedings for assessment of sales tax for the year 1959-60 the assessees were assessed to pay tax at the rate of seven per cent. on a turnover of Rs. 2,08,343.05 from sales effected by them to certain registered dealers in the State of Punjab. The assessing authority declined to assess the turnover at one per cent. as prescribed by section 8(1) of the Central Sales Tax Act, 1956, because in his view the assessees had submitted declarations in Form 'C' covering two or more transactions contrary to the first proviso to rule 10(1) of the Central Sales Tax (Madras) Rules, 1957. The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal, Madras, confirmed the order of the assessing authority. The High Court of Madras, in exercise of its revisional jurisdiction, set aside the order of the Sales Tax Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he is liable to pay tax at the higher rate mentioned in sub-section (2)(b) of section 8. The respondents did furnish declarations in Form 'C' prescribed under the Rules framed by the Central Government in exercise of the powers vested by section 13(1)(d) of the Central Sales Tax Act. But each such declaration covered more transactions of sale than one and the aggregate value of the transactions recorded in each declaration exceeded Rs. 5,000. The Sales Tax Authorities and the Tribunal were of the view that these declarations contravened the express direction of the rule made by the Madras State in exercise of the powers under section 13(4)(e) of the Central Sales Tax Act. The High Court held that rule 10(1) of the Central Sales Tax (Madras) Rules, 1957, applied only to a transaction of purchase by a dealer in the State of Madras, and not to the purchasing dealer in the State of Punjab, that the Madras State was incompetent to frame rules governing the conduct of the purchasing dealers in the Punjab, that since the corresponding rules framed by the State of Punjab under section 13(4)(e) of the Central Sales Tax Act did not include a provision requiring separate form to be used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (3), authorised to make rules for all or any of the purposes set out therein including "the authority from whom, the conditions subject to which and the fees subject to payment of which any form of declaration prescribed under sub-section (4) of section 8 may be obtained, the manner in which the form shall be kept in custody and records relating thereto maintained, the manner in which any such form may be used and any such declaration may be furnished". In exercise of the power conferred by section 13(1)(d) the Central Government has prescribed the form of declaration to be furnished by the purchasing dealer under section 8(4). That is Form 'C'. The form is in three sections-the "counterfoil", the "duplicate" and the "original". The "original" contains at the foot of the form the following Note: "(To be furnished to the prescribed authority in accordance with the rules framed under section 13(4)(e) by the appropriate State Government.)" The Madras State Government presuming to act in exercise of authority under section 13(3) and section 13(4)(e) framed the Central Sales Tax (Madras) Rules, 1957, rule 10(1) of which reads as follows: "A registered dealer, who wishes to pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.R.O. 643 dated February 22, 1957, specifying the persons mentioned in column (3) of the Schedule thereto as the authorities to whom the dealers of the description in column (2) shall make the application for registration. Item I of the Schedule requires a dealer having a single place of business in a State to make an application to the authority competent to register him under the general sales tax law of the State if he were liable to be so registered and item 2 provides that the dealer having more than one place of business in a State shall make an application to the authority competent to register him in respect of the principal place of business under the general sales tax law of the State if he were liable to be so registered. A registered dealer contemplated by rule 10 is therefore registered in the State where he has his place of business. The expression "assessing authority" is defined in the Central Sales Tax (Madras) Rules, 1957, as meaning any person authorized by the State Government to make any assessment under the Madras General Sales Tax Act, 1959 (Madras Act 1 of 1959). The dealer has again to obtain the form of declaration from the assessing authority in the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e its source in section 13(3) or section 13(4)(e); it can only be in the authority conferred by clause (d) of section 13(1) by the Central Government. The Central Government has, in exercise of the power under section 13(1)(d), prescribed the form of declaration and the particulars to be contained in the declaration. A direction that there shall be a separate declaration in respect of each individual transaction may appropriately be made in exercise of the power conferred under section 13(1)(d). The State Government is undoubtedly empowered to make rules under sub-sections (3) and (4) of section 13; but the rules made by the State Government must not be inconsistent with the provisions of the Act and the Rules made under sub-section (1) of section 13 to carry out the purposes of the Act. If the authority to make a rule prescribing that the declaration shall not contain more than one transaction can be made only under section 13(1)(d), the State Government cannot exercise that authority. The situation which has arisen in this case could have been avoided, if instead of each State making its rules requiring that no single declaration shall cover more than one transaction, the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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