MODERN PROTEINS LTD Vs. MODERN PROTEINS LTD

JUDGEMENT

(1.) The petitioner who is a registered dealer at Kurnool, entered into an agreement with the Food Corporation of India, through its Managing Director, New Delhi, for the supply of 4000/- metric tonnes of extracted edible groundnut flour at Rs. 1.930/- inclusive of tax. It is common ground that the petitioner - Company has been selling extracted edible groundnut flour and delivering jhe same at Madras and sending the invoices thereof to New Delhi. The petitioner-Company requested the respondent to send 'C' Forms, envisaged by Section 8 of the Central Sales Tax Act, 1956 (hereinafter called the Act) read with Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 (hereinafter referred to as the Rules). The Food Corporation of India, however, by its letter dated 19-9-1980, refused to isgue 'C' Forms on the ground that the rate quoted by the petitioner-Company is inclusive of sales-tax. The petitioner made further requests; but the respondent (Food Corporation of India) repeatedly rejected its request and finally on 19-2-1981. A legal notice issued by the petitioner-company on 3-3-1982 calling upon the respondent-Corporation to itsue "C' forms, did not bear any fruit. In the meanwhile, the Commercial Tax Officer, Kurnool, issued a notice dated 1-7-1981 to produce the 'C' forms ; and on failure to do so, assessed the petitioner to tax at 10% which is leviable on the turnover of Intra-State sales. The petitioner therefore seeks a writ of mandamus to direct the Food Corporation of India to issue the 'C' Forms as envisaged by the Act and as requested by it in its letter dated 1-8-1980.

(2.) Before proceeding to consider whether there is such an obligation on the part of the Food Corporation of India to issue 'C' Forms, we may notice the facts which are not in dispute. The petitioner is a registered dealer in Andhra Pradesh, having its office at Kurnool. Under the agreement, the goods to be supplied to the Food Corporation of India, are extracted edible groundnut flour. Though the Bills and Invoices referred to them as groundnut meal, so far as the Food Corporation of India is concerned, irrespective of the fact whether it is described as groundnut flour or groundnut meal, it appears that the description of the goods as groundnut meal covers both the groundnut flour and groundnut meal as such. Consequently, the bills which described the goods either as groundnut meal or as groundnut flour, were accepted by the Food Corporation of India as is evident from the photostat copies of Bills produced before this Court. The petitioner is a registered dealer of the said goods, which were in fact delivered at Madras as per the Invoices tent to New Delhi, at required under the agreement. There can be no doubt that the turnover covered by this transaction, is an Inter-State sale. The Food Coporation of India, is also a registered dealer under the Central Sales Tax Act, and all its Regional Offices under the Andhra Pradesh Geaeral Sales Tax Act. The sale is thus by a registered dealer in favour of a registered dealer. Under Section 8 (l)of the Central Sales Tax Act, every dealer, who in the course of inter-State trade or commerce 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. There is no dispute that the goods in question are goods falling within the description referred to in sub-sec. (3) of Section 8 of the Act. Sub-section 4 of Section 8 lays down that the provisions of sub-sec. (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 manner, 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. Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957, prescribes the declaration and the certificate referred to in sub-section (4) of Section 8 as forms 'C and 'D' respectively. Form 'D' is to be furnished by the Government, when goods are sold to the Government and Form 'C' is to be furnished by a registered dealer, other than the Government, to whom goods are sold. The Food Corporation of India being the dealer to whom the goods were sold by the petitioner, it required the Corporation to issue the 'C' Forms.

(3.) Sri Venkatrama Reddy, learned counsel for the Food Corporation of India, however contends that there is no statutory obligation imposed upon it expressly either by the Central Sales Tax Act or by the Rules made thereunder to issue 'C' Forms. According to him, the rules referred to above, merely enable a seller to pay sales-tax at 4% by producing 'C' Forms, and avoid the enhanced rate of sales-tax leviable in respect of the goods under the Andhra Pradesh General Sales Tax Act. Since there is no statutory obligation imposed upon the Corporation, it cannot be compelled to issue 'C* Forms. We are unable to agree with this contention. Section 8 of the Central Sales Tax Act makes it abundantly clear that if, in the course of inter-State trade or commerce, any sale is effected by a registered dealer, of the goods described in sub-section (3), the tax shall be only 4% of the turnover. Inter-State Sales attract only 4 % of tax; whereas Intra-State sale attracts 10% tax. In order to avoid controversy, the Legislature intended the seller and the purchaser, to furnish a declaration, and made a provision in sub-sec. (4) of Sec. 8 requiring the registered dealer to whom the goods are sold, to file a declaration as prescribed by the Rules. Rule 12 in so far as it is relevant for the purpose of this case, reads as follows: