GULATI, J. - (1.) IN compliance with the order of this Honourable Court dated 27th March, 1969, the additional Revising Authority, Sales Tax, Varanasi, has submitted this statement of the case under section 11(4) of the U.P. Sales Tax Act for the opinion of this court on the following question of law : "Whether a dealer unregistered under the Central Sales Tax Act in U.P. can also be give concessional rate of tax as provided under section 8 of the Central Sales Tax Act, if the sales are made to a registered dealer outside the State and unregistered dealer in U.P. procured 'C' forms from the purchasers, i.e. outside State dealers ?"
(2.) THE assessee was a proprietary concern which carried on business in the name and style of M/s. Educational Supplying Co. Ltd., Bullanala, Varanasi, and was a registered dealer. Subsequently the business was taken over by a partnership concern which carried on the business in the same trade name. The partnership, however, did not get itself registered under the belief that the old registration certificate would enure to its benefit. In respect of the assessment year 1960-61 the assessee was assessed to a tax of Rs. 317.80 on a net turnover of Rs. 4,540 under the Central Sales Tax Act. Even though the assessee-firm had filed the requisite declaration form 'C' covering the turnover, it was assessed at 7 per cent. and not at the concessional rate of 1 per cent. on the ground that the assessee was not a registered dealer. The assessee appealed and its appeal was allowed by the Assistant Commissioner (Judicial), Varanasi, who took the view that the concessional rate was available even to an unregistered dealer so long as the goods were sold to a registered dealer, who had furnished the requisite 'C' forms. This view has been confirmed by the Judge (Revisions) to whom the Commissioner of Sales Tax had applied in revision. Being dissatisfied, the Commissioner applied for a reference under section 11(1), but the revising authority declined to make a reference. Thereupon an application under section 11(4) was made which was allowed by this court.
(3.) THERE is no dispute about the turnover. The dispute relates only to the rate of tax. Section 8 of the Central Sales Tax Act deals with the rate of tax on sales in the course of inter-State trade or commerce. Section 8(1) of the Central Sales Tax as it stood at the material time provided : "Section 8(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 under this. Act which shall be 1 percent of his turnover." Sub-section (2) provided : "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 falling within sub-section (1) - (a) ............ (b) in the case of goods other than declared goods shall be calculated at the rate of 7 per cent. or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher ......." Sub-section (3) provided : "The goods referred to in clause (b) of sub-section (1) - (a) .......... (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power; (c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers or other materials used for packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for packing of any containers or other materials specified in the certificate of registration referred to in clause (c)." Sub-section (4) of section 8 is also relevant which provided : "The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner - (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b) ............" ;