STATE OF MADRAS Vs. R NANDLAL AND CO

JUDGEMENT

(1.) M/s. R. Nand Lal and Company -hereinafter called 'the assessee' - are dealers in wool at Vaniyambadi in North Arcot District in the State of Madras. In proceedings for assessment of sales-tax for the year 1959-60 the assessees were assessed to pay tax at the rate of sever, per cent, on a turnover of Rs. 2,08,343-05 from sales effected by them to certain registered dealers in the State of Punjab. The assessing authority declined to assess the turnover at one per cent. as prescribed by S. 8 (l) of the Central Sales-tax Act, 1956, because in his view the assessees had submitted declarations in Form 'C' covering two or more transactions contrary to the first proviso to R. 10 (1) of the Central Sales Tax (Madras) Rules, 1957. The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal, Madras confirmed the order of the assessing authority. The High Court of Madras, in exercise of its revisional jurisdiction, set aside the order of the Sales Tax Appellate Tribunal, and declared that the assessees were liable to pay tax on the turnover in dispute at the lower rate. The State of Madras has appealed to this Court with special leave.

(2.) Section 8 of the Central Sales Tax Act, 1956 (as amended by Act 31 of 1958) insofar as it is material provided:-

(3.) It is common ground that the turnover was in respect of goods of the class specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or for use by him in the process of manufacture of goods for sale. A registered dealer selling goods in the course of inter-State trade or commerce of the description referred to in sub-s. (3) is liable under S. 8 (1) of the Central Sales Tax Act to pay tax only at the rate of one per cent on his turnover. But to qualify himself for that rate of tax, he has to furnish to the prescribed authority a declaration duly filled and signed by the registered dealer to whom the goods are sold. Such a declaration must contain the prescribed particulars in the prescribed form obtained from the prescribed authority. If the selling dealer fails to furnish the declaration in the prescribed form, he is liable to pay tax at the higher rate mentioned in sub-s. (2)(b) of S. 8.