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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 ..... viso 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 Appellate Tribunal, and declared that the assessees were liable to pay tax on the turnover in dispute at the lower rate. The State of Madras has appealed to this Court with special leave. Section 8 of the Central Sales Tax Act, 1956 (as amended by Act 31 of 1958), in so far as it is material, provided: "(1) Every dealer, who in the course of inter-State trade or commerce- (a) * * * (b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3); shall be liable to pay tax under this Act, which shall be one per cent. of his turnover. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub- section (1)- (a) * * * (b) in the case of goods other than declared goods, shall be calculated at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 for each sale transaction, the purchasing dealers were not obliged to comply with rule 10(1) of the Madras Rules, and that since the Madras selling dealers could not compel the purchasing dealers to comply with the rules relating to furnishing of separate declaration forms ordained by the Madras Rules, the declarations were not defective. In any event, the High Court held rule 10(1) of the Madras Rules was directory and not mandatory. The assumption made by the High Court that no rule was framed by the State of Punjab under section 13(4)(e) of the Central Sales Tax Act requiring the purchasing dealers in the State of Punjab to issue a separate declaration form in respect of each individual transaction is erroneous. It is conceded before us that the Punjab Government had in purported exercise of the powers under sub-sections (3) and (4) of section 13 of the Central Sales Tax Act, 1956, made ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 purchase goods from another such dealer on payment of tax at the rate applicable under the Act to sales of goods by one registered dealer to another, for the purpose specified in the purchasing dealer's certificate of registration, shall obtain from the assessing authority in the City of Madras and the registering authority at other places a blank declaration form prescribed under rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, for furnishing it to the selling dealer. Before furnishing the declaration to the selling dealer, the purchasing dealer or any responsible person authorized by him in this behalf shall fill in all the required particulars in the form and shall also affix his usual signature in the space provided In the form for this purpose. Thereafter, the counterfoil of the form shall be retained by the purchasing dealer and the other two portions marked 'origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 State of Madras. These are clear indications that the Rules framed by the Madras Government were intended to apply to dealers within the State of Madras. The High Court was, in our judgment, right In holding that under the scheme of the Central Sales Tax Act and the Rules framed under that Act by the State of Madras, the injunction against the purchasing dealers in rule 10(1) did not apply to dealers in the State of Punjab. It is unnecessary on that view to express any opinion on the question whether the State Government could, in exercise of the powers under section 13(4), impose upon dealers not within the State, obligations to comply with conditions relating to the contents of the 'C' Form declarations. Since rule 10(1) requiring that a separate declaration form in respect of each individual transaction shall be furnished was intended only to apply to dealers in the State of Madras, and not to dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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