- (1.) IN all these writ petitions common questions of law involve, therefore, they are disposed of by this common order.
(2.) FOR the convenient disposal of all these writ petitions the facts given in the case of Sarvotam Vegetable Products Pvt. Ltd. Merta City vs. State of Rajasthan & Others (S. B. Civil Writ Petition No. 1838 of 1992) are taken into consideration. The petitioner by this writ petition has prayed that the impugned notice dated 9. 3. 1992 (Annex. 7) may be quashed and the respondents may be restrained from passing the assessment order in pursuance of the aforesaid notice and recover any tax, interest and penalty from the petitioner. It is also prayed that it may be declared that the production of C Form is not necessary in the present case. The petitioner is a duly constituted and registered private limited company and all the Directors of the petitioner company are citizens of India. The petitioner sold edible oil manufactured by it in the course of inter-State sale through the Commission Agents and through prescribed declaration in C Form prescribed under Section 8 (4) of the Central Sales Tax Act, 1956 (referred to herein after as 'the Act of 1956' ). The same were duly furnished by the petitioner to the Assessing Authority. The said C Forms were duly issued to the purchasing dealer and bears the seal of the office of the C. T. O. in Gujarat State from where they were duly issued to the purchasing dealer. The purchasing dealer is duly registered under the Act of 1956 as well as the Gujarat Sales Tax Act. The petitioner charged the concessional rate of tax at the rate of 1-1/2% under the notification dated 26. 12. 1986 and the later notification dated 17. 4. 1990 on such sales as it satisfied the twin conditions given in these notifications. Copies of these notifications have been placed on the record as Annexs. 1 and 2 respectively. The respondent No. 2 has now initiated certain anti evasion proceedings against the petitioner on the allegation that from the verification of the record of such purchasing dealer, the said C Forms in question were shown to have been issued to some third party and, therefore, additional tax alongwith interest and penalty is sought to be imposed on the petitioner. It is alleged that the petitioner being the selling dealer is not expected under the law to go into the details or depth as to whether the purchasing dealer is duly registered or not and whether the C forms issued by the concerned C. T. O. are correct or not. The petitioner not questioned and charged the concessional rate of tax. It is alleged that if at all such declaration forms given by the purchasing dealer were found to be erroneous then the selling dealer cannot be held responsible for this conduct of the purchasing dealer. It is alleged that there is no allegation against the petitioner selling agent of any fraud, collusion or misrepresentation. Neither the factum of inter-State sale is denied nor it is alleged by the Revenue that the said declaration forms are not genuine. In the alternative, it is submitted that the C forms were not at all required to be furnished in the present case. The notifications Annexs. 1 and 2 purported to have been issued under sub-section (5) of section 8 of the Act of 1956 do not require that the selling dealer is under an obligation to produce the C forms. It is submitted that in view of sub-section (5) of Section 8 of the Act of 1956 which starts with a non-obstante clause, the requirement of sub-section (4) of Section 8 is not necessary and as such the selling dealer is not under an obligation to produce the C forms of the purchasing dealer. It is also alleged that the notifications which have been issued by the State Government under Section 8 (5) of the Act no where require the production of the C forms of the purchasing dealer in order to get a concessional rate of tax. Therefore, the petitioner has challenged the notice issued by the respondent No. 2. It is also submitted that the petitioner has also received the impugned notice dated 7. 11. 1992 from the Assistant Commissioner, Commercial Taxes, Anti-Evasion Circle, Jaipur I, Jaipur calling upon the petitioner to show cause as to why it should not be assessed for alleged evasion of tax. Therefore, it is submitted that the Assistant Commissioner, Commercial Taxes, Anti-Evasion Circle, Jaipur, who has issued the notice dated 7. 11. 1992, is seized of the matter and the subsequent notice cannot be issued. A reply has been filed by the respondents and the respondents have pointed out that the petitioner has voluntarily submitted the C forms of the purchasing dealer and it was found that the purchasing dealer's C forms were cancelled long back and at the time when the transaction was entered into by the petitioner the purchasing dealer was not a registered dealer and the C forms were cancelled long back. It is also alleged that a big scandal has been disclosed by the Anti. Evasion authorities that such kind of dealers whose registration has already been cancelled have entered into shame transactions so as to avoid tax. A number of instances have been given by the respondents and it has been alleged that all the purchasing dealers to whom the selling dealer has supplied the edible oil at concessional rate were not registered dealers and their C forms have already been cancelled. A number of documents have been produced on the record to show that all these transactions have been entered into by the selling dealer with the purchasing dealers whose registrations have been cancelled and likewise the C forms have also been cancelled. In that connection, my attention was also invited to the communication received from the Sales Tax Officer, Bombay in respect of M/s. Shanti Lal & Co. , Bombay in which it has been mentioned that M/s. Shanti Lal & Co. has applied for cancellation of its registration certificates because M/s. Shanti Lal & Co. , Bombay had discontinued its business from 1. 12. 1990 and accordingly both the registration certificates of that firm were cancelled with effect from 1. 12. 1990 and he also sent a copy of the cancellation order dated 1. 12. 1990. It is also said that no declaration such as C or F, E1 or E2 forms have been issued to M/s. Shanti Lal & Co. by the Sales Tax Department. Therefore, the respondents have pointed out that sham transactions have been entered into with these kind of firms by the petitioner so as to avail the concessional rate of tax on inter-State trade or commerce with a view to avoid payment of normal rate of tax. It is also submitted that while availing the concession under Section 8 (5) read with the notifications Annexs. 1 and 2 still the requirement of submission of C forms under Section 8 (4) of the Act is not dispensed with. I have heard the learned counsel for the parties and also perused the record.
(3.) MR. Kothari, learned counsel for the petitioners has submitted that the basic question involved in this writ petition and the connected writ petitions is whether in such inter-State trade or commerce the requirement of submitting the C forms is mandatory or not. In order to appreciate the controversy in this batch of writ petitions, it will be useful to refer to Section 8 of the Act of 1956, which reads as under: - "8. Rates of tax on sales in the course of inter-State trade or commerce. (1) Every dealer, who in the course of inter-State trade or commerce - (a) sells to the Government any goods; or (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 four 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) in the case of declared goods, shall be calculated at twice the rate applicable to the sale or purchase of such goods inside the appropriate State ; and (b) in the case of goods other than declared goods, shall be calculated at the rate of ten per cent or at the rate applicable to the sale of purchase of such goods inside the appropriate State, whichever is higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the Sales Tax Law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law. (2a) Notwithstanding anything contained in sub-section (1a) of section 6 or sub-section (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the Sales Tax Law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent whether called a tax or fee or by any other name, shall be nil or, as the case may be, shall be calculated at the lower rate. Explanation: - For the purposes of this sub-section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the Sales Tax Law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. (3) The goods referred to in clause (b) of sub-section (1) - (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 the packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c ). (4) 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) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government : Provided that the declaration referred to in clause (a) is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit. (5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct, - (a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter-State trade or commerce, from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification; (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-State trade or commerce, by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification. " We are concerned here with sub-section (5) of Section 8 of the Act of 1956. Section 8 (5) of the Act starts with a non-obstante clause. The basic idea behind sub-section (5) of Section 8 is that if the State Government feels in the public interest to grant concession on inter-State trade or commerce then it can exempt the tax or reduce the tax on inter-State trade or commerce under the Act payable by any dealer having his place of business in the State in respect of sales by him in the course of inter-State trade or commerce from any such place of business of any such goods or classes of goods as may be specified in the notification. ;