(1.) From paddy purchased by the revisionist it produces rice for the purpose of selling the same. At the same time, it purchases rice as well as wheat also for the purpose of selling the same. In the instant case, we are concerned with sale of rice and wheat effected by the revisionist outside the State of Uttarakhand for the assessment years 2000-01 and 2001-02. While purchasing paddy, rice and wheat, revisionist paid State sales tax. While effecting inter-State sale thereof, it was required to pay Central sales tax. It claimed that it is liable to pay Central sales tax at the rate of four per cent. The Sales Tax Department accepted the same. It further claimed that from the sales tax so payable, it is entitled to set off such sales tax, which it has already paid at the time of purchasing paddy, rice and wheat to the State Government. This contention was accepted by the Sales Tax Department of the State Government from the assessment years 1994-95 to 1999-2000. While assessing the returns for the years 2000-01 and 2001-02, the assessing authority held that since form C has not been furnished by the revisionist, it was not entitled to claim that it indulged in inter-State sale. The assessing authority, accordingly, imposed tax on the amount representing the difference of the sale price and the purchase price. The net effect thereof was that revisionist got set off of the tax already paid from the tax leviable on the sale effected by the revisionist. Revisionist went before the appellate authority. No appeal was preferred by the Revenue. Despite having had got what the assessee was seeking to get, it was urged before the appellate authority by the revisionist that in terms of the notification issued by the State Government on October 1, 1994 under sub-section (5) of section 8 of the Central Sales Tax Act, 1956, in the event, the revisionist had paid tax to the State Government on purchase made by it, it was not necessary for the revisionist to furnish C form. The appellate authority rejected the said contention, which contention has been affirmed by the Tribunal. Hence, the present revision. The appellate authority, without there being an appeal by the State Government, however, held that the revisionist was not entitled to what the assessing authority allowed/permitted. It held that the revisionist was not entitled to deduction from its tax liability the amount of tax already paid on purchase. This part of the judgment of the appellate authority, which has been affirmed by the Tribunal is not sustainable in law, inasmuch as, in the appeal preferred by the revisionist and there being no cross appeal or independent appeal by the Revenue, an order contrary to that part of the judgment, which had not been appealed against, could not be allowed. We, accordingly, strike down that part of the judgment of the appellate authority, affirmed by the Tribunal, holding that the revisionist was not entitled to set off the tax already paid on the purchases made from the liability of the taxes payable for effecting sale.
(2.) The charging section of the Central Sales Tax Act, 1956 is section 8(1), which is as follows :
Every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in subsection (3), shall be liable to pay tax under this Act, which shall be *(two percent) (*substituted for 'three per cent' vide Notification No. 1/2008-CST, dated March 30, 2008, with effect from June 1, 2008) of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower :
Provided that the Central Government may, by notification in the Official Gazette, reduce the rate of tax under this sub-section.
(3.) Before the assessing authority, the revisionist did not contend that it is liable to pay tax under the said Act at the rate of two per cent. instead it contended that it is liable to pay tax at the rate of four per cent. The reason is that section 14 of the said Act has declared that paddy, rice and wheat, amongst others, are goods of special importance. In section 15(a) of the said Act, all the State Governments have been restrained from imposing tax on sale or purchase of such goods of special importance at a rate exceeding four per cent and the State Government too has imposed tax on paddy, rice and wheat at the rate of four per cent. Therefore, in fact, revisionist was not seeking to come within the purview of sub-section (1) of section 8 of the said Act, inasmuch as, though in terms thereof, it was entitled to pay the lower tax of two per cent, it was not insisting for the same. In terms of the provisions contained in sub-section (1) of section 8 of the said Act either two per cent on the rate fixed by the State Government, whichever is lower, was payable. Provisions of sub-section (1) of section 8 will apply to those sales only, where C forms have been provided as is the mandate of sub-section (4) of section 8 of the said Act. In the instant case, revisionist has not provided C forms. Therefore, in that view of the matter too, the revisionist was not entitled to the benefits of section 8(1) of the said Act. The notification in question dated October 1, 1994, upon which reliance has been placed, which was issued in purported exercise of power conferred by sub-section (5) of section 8 of the said Act, clearly imposes an obligation to pay tax at the rate of four per cent in respect of sale made in course of inter-State trade or commerce of goods liable to tax at the rate of four per cent without furnishing form C. In so far as sub-section (5) of section 8 of the said Act is concerned, the same authorizes the State Government to exercise powers conferred upon it by the said sub-section only on the fulfilment of the requirement laid down in sub-section (4) of section 8 of the said Act by the dealer in question. Therefore, in exercise of power conferred in sub-section (5) of section 8, the State Government had no authority to dispense with the requirement of furnishing of form C. To that extent, therefore, the said notification dated October 1, 1994, being contrary to the mandate contained in sub-section (5) of section 8 of the said Act, could not be acted upon or relied. However, the matter has to be looked at from a different point of view. The fact remains that the statute embodied in the said Act requires a declaration, as mentioned in the said statute, which is in the form of form C for the purpose of establishment of the fact that there is an inter-State sale. In the absence of furnishing of a form C, the conclusion would be that the sale is not an inter-State sale. Accordingly, in respect of such sale, the State law will apply. In the event it has been provided in the State law that a dealer will be entitled to set-off of the tax already paid, he will be entitled to the same. In the event it is provided in the State law that no such set-off will be allowed, the dealer will not be entitled to the same. In other words, in the absence of furnishing of form C, the matter will not be dealt with under the Central Sales Tax Act, 1956, but under the State law dealing with the matter. In the event, however, form C is furnished, the matter will come within the Central Sales Tax Act, 1956, where there being no provision for set off, except in respect of tax paid for procurement/purchase of paddy as mentioned in section 15(c) of the said Act, there cannot be any set-off of the tax paid for procurement/purchase of any other commodity, except paddy, from the tax leviable under the Central Sales Tax Act, 1956. It is clarified that law, as propounded herein, was in vogue since April 1, 1973, when sub-section (5) of section 8 was substituted. Since penalty, if any, leviable under the Central Sales Tax Act, 1956 for effecting inter-State sale without furnishing form C was not the subject-matter of the revision, we have not considered the same. With the direction, as above, the revision is disposed of.;