G. SIVARAJAN, J. - (1.)THE question arising for consideration in these two writ petitions is regarding the validity of pre-assessment notices issued by the assessing authority proposing to reject the claim of exemption in respect of turnover of sale in transit effected by the petitioners on the ground that the petitioners failed to produce documentary evidence such as copies of endorsement of title and the consignee copy of lorry receipt or railway receipt. In other words, the question is as to whether, for the purpose of claiming exemption in respect of sale in transit the assessees are obliged under the provisions of the Central Sales Tax Act and the Rules made thereunder to produce the documents mentioned above in addition to E-I and C form declarations.
(2.)THE petitioners in both the cases are dealers in paper and paper products. Most of the items are purchased from States outside Kerala against C forms for resale in Kerala. In some cases the goods so purchased from outside the State are sold in the course of transit. Such inter-State sales or second inter-State sales are entitled to exemption from sales tax by virtue of section 6 (2) of the Central Sales Tax Act, 1956. Under the proviso to the said section any such claim for exemption has to be proved by producing a certificate in the prescribed form issued by the selling dealer from outside and a declaration obtained from the purchasing dealer in Kerala. As per rule 12 (4) of the Central Sales Tax (Registration and Turnover) Rules, 1957 the certificate required to be obtained from the selling dealer for claiming exemption under section 6 (2) is E-I or E-II form prescribed by the said rule. Similarly the declaration to be obtained from the purchasing dealer under clause (b) (i) of the proviso to section 6 (2) is the same declaration provided under section 8 (4) (a) of the Central Sales Tax Act which is form C. THErefore the scheme provided under section 6 (2) of the Central Sales Tax Act for claiming exemption in respect of subsequent inter-State sales made by endorsement of title to goods which is the lorry receipt or the railway receipt is to obtain E-I form from the dealer who first sold the goods from outside State and to obtain C form from the ultimate dealer to whom the goods are sold by endorsement of the lorry receipt or railway receipt as the case may be. 2a. It is stated that the petitioners have been claiming exemption on subsequent inter-State sales for last nearly twenty years by producing E-I form obtained from the sellers from outside Kerala and C form obtained from the parties to whom the petitioner has sold the goods in Kerala by endorsement of lorry receipt. It is also stated that the procedure followed by the petitioner is to place purchase orders with the suppliers outside Kerala who will book the goods by public carriers and forward the negotiable consignee copy of the lorry receipt together with their invoice on the petitioner that on receipt of the lorry receipt the petitioner endorses the same to local purchaser in Kerala and deliver the lorry receipt along with the invoice after receiving payment, that the purchaser takes delivery of the goods from the carrier with the help of the lorry receipt endorsed by the petitioner in favour of the purchaser, that outside supplier issues the E-I forms and the local buyer from petitioner in Kerala issues C form to the petitioner, that the petitioner has been claiming exemption in all the past years on the basis of the E-I forms and corresponding C forms obtained by them and that the first respondent has also allowed exemption with the help of certificate and declaration so produced. It is also stated that the endorsed lorry receipt is surrendered by the ultimate buyer to the public carrier and a photocopy was not taken or retained by the petitioner at the time of endorsement and delivery, that the first respondent never requested for photo copies of lorry receipt for any other past years and that the assessment under the Kerala General Sales Tax Act and Central Sales Tax Act had also been completed up to 1990-91 granting exemption from the sales tax on subsequent sales under section 6 (2) of the Central Sales Tax Act on the basis of E-I forms and C forms produced by the petitioner. THE petitioner has also produced the assessment orders under the Kerala General Sales Tax Act and under the Central Sales Tax Act for the year 1990-91 as exhibits P1 to P4. It is further stated that the assessments prior to 1990-91 were completed on similar lines and no other documents or evidence other than certificate and declaration in form E-I and form C respectively were called for. It is stated that the first respondent has not directed the petitioner to take photo copies of lorry receipts and produce before him.
The complaint of the petitioners in these original petitions is that the first respondent for the first time issued notice after verifying books of accounts for the assessment years 1991- 92 and 1992-93 directing the petitioner to produce photo copies of endorsed consignee copies of lorry receipt, that since there is no requirements under the Sales Tax Act or Rules to maintain photo copies of the endorsed lorry receipt and that since the first respondent has also not requested the petitioner to keep any such copy, the petitioner has not taken photo copies before the delivery of the endorsed lorry receipts to the buyers. Therefore the petitioners filed replies stating that the photo copies of the lorry receipts were never called for, for any of the previous years and therefore the petitioners have not kept the same for the assessment years 1991-92 and 1992-93,and the petitioners expressed their inability to produce endorsed lorry receipts and requested the first respondent to complete the assessments granting exemption under section 6 (2) on the basis of E-I forms and C forms produced.

In O. P. No. 15130 of 1995 the first respondent issued pre-assessment notice under section 17 (3) of the Kerala General Sales Tax Act for the year 1991-92 proposing to disallow exemption in respect of sales made in transit on the ground that the petitioner has not produced endorsed consignee copy of lorry receipt notwithstanding the production of E-I forms and C forms evidenced by exhibit P7. It is in these circumstances the petitioners have challenged the pre-assessment notices issued by the first respondent.

(3.)STATEMENTS are filed on behalf of the first respondent in both the cases. After referring to the requirements of section 6 (2) of the Central Sales Tax Act read with rule 12 (4) of the Central Sales Tax (Registration and Turnover) Rules, 1957 it is stated in paragraph 5 of the statement in O. P. No. 15130 of 1995 as follows : " 5. It was brought to the notice of the Board of Revenue (Taxes), Trivandrum, that production of large scale bogus certificates in respect of the transactions of the above nature is going on among the business community. Eligibility for exemption is available only if the inter-State sale is made to a registered dealer, Sometimes it was come to the notice of the Board of Revenue that the form C declarations produced bogusly in order to obtain exemptions. With a view to curtail the abovesaid practice and thereby to curb the evasion of payment of tax, Board of Revenue had issued circular No. 20/91/t dated December 24, 1991 to the assessing authorities to insist upon the true verification regarding the nature of the 'sale' in the above transactions. True verification to ensure that there occurs a sale, means, by transfer of property in goods by one person to another for cash paid or agreed to be paid, followed by delivery of goods to the buyer. In the above nature of transactions the delivery must be by way of transfer of documents of title. The endorsement of title and delivery of the consignee copy of the lorry receipt or railway receipt or bill of lading is the point on which the transfer of title. Therefore to prove claims of exemption in clear terms that the transfer was made by means of endorsement of title. In order to verify this it is necessary to check the copies of the endorsement made in the document of title. Therefore the assessing authorities are justified and is well within their jurisdiction to ask for production of the copies of lorry receipt or railway receipts. So also the rejection of the claim for exemption on the ground of non-production of those documents are legal and valid. "
It is also stated that the proceedings before the first respondent are only at the pre-assessment stage and therefore it is premature on the part of the petitioner to challenge the said notices in proceedings under article 226 of the Constitution of India.