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TMI Blog1998 (2) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... nover is covered by the bill No. 1373 dated March 19, 1979, but the turnover is not covered by the declaration in form C. The Deputy Commercial Tax Officer, Peddunaickenpet (South) Circle, Madras-1, proposed to assess the said turnover at 10 per cent on the ground that the sale was not covered by the necessary declaration in form C, and after granting opportunity to the assessee for the production of C form and after hearing the assesseedealer brought to tax the said turnover at the rate of 10 per cent. The assessee preferred an appeal to the Appellate Assistant Commissioner (CT) II, Madras, against the levy of tax at the rate of 10 per cent on the said turnover. The Appellate Assistant Commissioner found that the assessing officer had given sufficient time to the assessee-dealer for the production of C form, and the assessee-dealer did not respond to anyone of the notices issued by the assessing officer for the production of C form nor did the assessee-dealer filed the C form for claiming the exemption. The Appellate Assistant Commissioner, therefore, held that the order of the assessment made by the assessing officer did not call for any interference. The assessee then carried th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, the submission of the learned Government Advocate was that the sale was one falling under section 3(b) of the CST Act and under the proviso to section 9(1) of the CST Act, the turnover was liable to be assessed under the CST Act. In so far as the second item of dispute, viz., Rs. 14,441 is concerned, he submitted that even according to the letters relied upon by the Appellate Tribunal, the sale was made by the assessee-dealer to the Coimbatore Municipality and it was not a sale to the electricity undertaking and therefore, the sale was not exempt under section 17 of the TNGST Act. He also submitted that the Appellate Tribunal proceeded on wrong assumption that the rate of tax was 3 per cent and submitted that the assesseedealer is not entitled to exemption under the proviso to section 6(2) of the CST Act. 6.. Mr. Pramodkumar Chopta, appearing for Mr. Moolchand Jain, learned counsel for the assessee-dealer submitted that in so far as the first item of turnover is concerned, the sale was a section 6(2) sale and therefore, the proviso to section 9(1) of the CST Act would not apply. He further submitted that in so far as the second item is concerned, the sale was to an ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when delivery is taken from such carrier or bailee. Section 6 of the C.S.T. Act imposes the liability to tax on inter-State sales of goods other than electrical energy effected in the course of inter-State trade or commerce during that year. Sub-section (2) of section 6 of the CST Act grants exemption from the levy of Central sales tax on inter-State sale, if the subsequent sale was effected during the movement of goods from one State to another in favour of the Government or to a registered dealer provided the conditions prescribed in sub-section (2) of section 6 are complied with. Admittedly, it is not a case falling under the second proviso to subsection (2) of section 6 of the Act as the assessee has not established that the sale of the goods was exempt under the provisions of the TNGST Act or was subject to tax at a rate lower than 4 per cent. Therefore, the assessee will be eligible to get exemption under sub-section (2) of section 6 of the CST Act, if and only if the assessee satisfies the statutory conditions prescribed in the first proviso to sub-section (2) of section 6 of the Act. One such condition is the furnishing of C form and other condition is the furnishing of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of section 8(4)(a) in connection with the purchase of such goods it means that the C form certificate has been obtained in respect of a particular first sale of the goods. The concluding phraseology in the proviso is not used in the abstract; but since the jurisdiction is to be localised with reference to particular transactions, the form spoken of must necessarily relate to such transactions. Therefore for the application of the proviso to section 9(1) not only the C form should be obtained from the taxing State but it should also be in connection with the purchase of the goods involved in the second sale." 12.. The provision of sub-section (1) of section 9 of the C.S.T. Act was again considered by this Court in State of Tamil Nadu v. Bombay Metal Depot [1978] 41 STC 140. In that case, the assessee placed orders with a Bombay party for the purchase of certain goods and the goods were directly sent from Bombay to Kerala and the assessee endorsed the documents of title to the goods after the Bombay party put the goods on board the train and the assessee claimed exemption on the ground that it had complied with the provisions of section 6(2) of the Act. In that fact-situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the State which is empowered to levy and collect tax from the assessee. Though the earlier decision of this Court in K. Nandagopal Chetty's case [1968] 22 STC 290, was not referred to, the Division Bench of this Court in Bombay Metal Depot case [1978] 41 STC 140 held that the State of Tamil Nadu has the statutory power to levy the tax by virtue of the provisions of section 9 of the C.S.T. Act. 13.. The Andhra Pradesh High Court in Jadhavjee Laljee v. State of Andhra Pradesh [1989] 74 STC 201 noticed the amendment made to the proviso to sub-section (1) of section 9 of the C.S.T. Act by the Central Act 28 of 1969 and took the view that the effect of the earlier decision of this Court in K. Nandagopal Chetty's case [1968] 22 STC 290 was neutralised by the legislative amendment made by the Act 28 of 1969. The Andhra Pradesh High Court held as under: "The object of the proviso to section 9(1) of the Central Sales Tax Act, 1956 is to determine or specify the appropriate State competent to tax second or subsequent sales not falling under section 6(2) of the Act. For this purpose, even where the sale in favour of a dealer effecting such second or subsequent sale is exempt, it has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ospective effect. In the amended provision the words 'or, as the case may be, could have obtained' have been inserted. As a result of this amendment the proviso to sub-section (1) of section 9 would cover a situation where the declaration in form C could have been obtained by the dealer and he has not obtained such a declaration." The Rajasthan High Court in Rajendra Trading Company v. C.T.O. [1994] 93 STC 71 has taken a similar view to the effect that under the proviso to sub-section (1) of section 9 of the C.S.T. Act, the State which could have issued the form under clause (a) of sub-section (4) of section 8 of the C.S.T. Act has the jurisdiction to levy tax under C.S.T. Act. 15.. On perusal of the file, we find that the assessee was under the impression that in order to claim exemption with reference to a sale subsequent to the first sale, the requirements of filing C form was only directory and for the failure to produce C form, the assessee cannot be denied the exemption. This view was entertained on the basis of the decision of the Madhya Pradesh High Court in Bhojumal Sons v. Commissioner of Sales Tax [1979] 44 STC 474. The above decision of the Madhya Pradesh High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Tamil Nadu has no power to levy tax is erroneous in law and the order of the Appellate Tribunal to that extent is liable to be set aside and accordingly, it is set aside. 18.. In so far as the second point of dispute relating to the sale turnover of Rs. 14,441 is concerned, we have already set out the facts in detail and the Appellate Tribunal held that the sale was to the electricity undertaking of a local body and the rate of tax was 3 per cent and hence, it was not necessary for the assessee to produce C form. The Appellate Tribunal held that the sale was exempt under section 17 of the T.N.G.S.T. Act and therefore, under the provisions of section 6(2)(b) of the C.S.T. Act, the assessee was not required to produce D form. 19.. To appreciate the point raised, it is necessary to notice some of the provisions of the C.S.T. Act. We have already seen section 6 and 6(2) of the C.S.T. Act and it is not necessary to repeat the same. However, it is necessary to notice sub-section (1) of section 8 of the C.S.T. Act which prescribes the rate of tax on sales effected in the course of inter-State trade or commerce and sub-section (2) of section 8 of the C.S.T. Act deals with the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier notification of the year 1960 and there is no notification, to which our attention was drawn, which reduced the rate of tax to 3 per cent. We have also perused other notifications and there is no notification granting general exemption in the case of sale either to Coimbatore Municipality or to the electricity undertaking of the local body. In the absence of any notification reducing the rate of tax to below 4 per cent, the assessee-dealer has necessarily to comply with the provisions of section 6(2) of the C.S.T. Act and produce D form and if the sale is a sale under sub-section (2) of section 6 of the C.S.T. Act, the assessee is eligible to get exemption only on furnishing necessary forms required to be produced under sub-section (2) of section 6 of the Act. The assessee, admittedly, has neither produced C form, nor submitted D form before the lower authorities and in our view, the Appellate Tribunal has proceeded on an erroneous assumption that the sale was to the electricity undertaking and the rate of tax for the said sale was either at 3 per cent or was exempt from tax and hence, the assessee was not required to produce D form. Since the assessee has not fulfilled the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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