BIMETAL BEARINGS LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE unsuccessful assessee, a manufacturer and a dealer in automotive thinwall bearings, bushings and thrust washers at Coimbatore is the petitioner in the above revision. THE assessee reported for the assessment year 1978-79 a total turnover of Rs. 3, 50, 13, 408 in its returns submitted under the Central Sales Tax Act, 1956. THE assessee has also filed many C forms and claimed assessment at concessional rate of sales tax of 4 per cent on the basis of those C forms. THE assessing authority after close scrutiny, during the course of assessment, found sixteen C forms to be defective and disallowed the claim for the concessional amount in respect of those turnover covered by the said C forms. THE turnover in question relating to the said C forms is Rs. 1, 31, 467. 26 and the said turnover was subjected to the levy at 13 per cent. THE total taxable turnover of the assessee was determined at Rs. 3, 48, 46, 209. 50 by the proceedings dated December 15, 1980.

(2.) OBJECTING to the rejection of the said sixteen C forms and the denial of the concessional rate of taxation, the petitioner filed an appeal before the first appellate authority who confirmed the order of the assessing authority in this regard and rejected the appeal. Thereupon, the matter has been pursued before the Appellate Tribunal. The Appellate Tribunal also concurred with the conclusions of the authorities below and was of the view that in so far as the C forms comprised transaction exceeding the monetary limit of Rs. 5, 000 in respect of more than one transaction they are invalid and consequently would not come to the rescue of the petitioner to claim concessional rate of taxation.

(3.) THE real object and purpose behind the provision for purchasing the necessary C form is to ensure that the sale was to a person and for the purposes contemplated in law and set out in the C form itself. THE defect alleged in respect of the sixteen C forms in question, in our view, cannot be said to be so fundamental in respect of any essential feature going to the root of the matter so as to affect the very legality and validity of the very C form. It is not in dispute that if it is in respect of one transaction even though the monetary limit exceeds Rs. 5, 000 the C form would have been secured properly. That apart, there is nothing in law which obliges the assessee to secure the C form simultaneously when the transaction of the sale takes place and the law permits production of the C forms issued by the purchasing dealer before finalisation of assessment and subject to showing reasonable cause even during the time of appeal and further appeal before the tribunal. We are highlighting the above aspects only to impress that the ultimate requirement appears to be the actual production of the C forms as such to establish the genuineness of the transaction and the fact that it satisfies the category of sales entitled to concessional rate of tax, as prescribed in law. When there is no challenge based on the absence of any such requirement of particulars, to reject the C forms in their entirety and to deprive the assessee of the benefit of concessional rate of taxation on the mere ground that the forms produced comprised of more than one transaction in excess of the monetary limit, would be arbitrary and unreasonable. THE denial of concessional rate of taxation conferred under the statute by prescribing a requirement under the Rules having the force of defeating the object of the statute, cannot be considered to be either reasonable or justifiable. THE requirement relating to the monetary limit in respect of more than one transaction for an individual C form in our view would at the most be a directory requirement and cannot be construed to be a mandatory one so as to undermine the very efficacy or validity of the C forms themselves warranting their rejection. Consequently, we are of the view that the reasons which weighed with the authorities below to reject the C forms cannot have our approval in law and the order of the tribunal is therefore set aside. Since the C forms in question were rejected only on this sole ground and not on any other ground, we see no reason to remit the matter and we declare that the petitioner shall be entitled to the concessional rate of taxation in respect of the turnover covered by the sixteen c forms in question. THE tax case (revision) stands allowed. No costs. .