Under the CST Act there are various declaration forms. The forms are required to be furnished as per given periodicity. As per Rule 12(1) and Rule 12(9)(b) of the CST (Registration & Turnover) Rules, 1957, the C/E1/EII forms can be on quarterly basis. In other words, the forms can be for individual transaction or can be for all transactions in one quarter. As per Rule 12(5) of the CST (R & T) Rules, 1957, ‘F’ Forms can be on monthly basis. However, there is some ambiguity about periodicity of ‘I’ forms.
Few aspects of periodicity of ‘I’ forms are discussed below:
This form is issued by Special Economic Zone Unit to its supplier when the transaction is inter-State purchase from such supplier. The sales against ‘I’ forms are fully exempt from levy of CST in the hands of suppliers. ‘I’ form is issued as per section 8(8) of the CST Act, 1956. The said section reads as under:
“(8) The provisions of Ss. (6) and (7) shall not apply to any sale of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the authority referred to in Ss. (6), a declaration in the prescribed manner on the prescribed form obtained from the authority referred to in Ss. (5), duly filled in and signed by the registered dealer to whom such goods are sold.
Explanation — For the purpose of Ss. (6), the expression ‘special economic zone’ has the meaning assigned to it in clause (iii) to Explanation 2 to the proviso to section 3 of the Central Excise Act, 1944.”
In light of the above provision, the Central Government has prescribed Rule 12(11) in the CST (Registration & Turnover) Rules, 1957. The said Rule is reproduced below for ready reference:
“12(11)The dealer, selling goods in the course of inter-State trade or commerce to a registered dealer under sub-section (6) or under sub-section (8) of section 8 or under subsection (1) of section 5 of the Central Sales Tax Act, 1956 read with section 76A of the Customs Act, 1962 (52 of 1962), shall furnish a declaration for the purposes of Ss. (8) of the said section 8 in Form I duly countersigned and certified by the Authority specified by the Central Government authorising the establishment of the unit in the Special Economic Zone (notified u/s. 76A of the Customs Act, 1962 (52 of 1962) that the sale of goods is for the purpose of establishing a unit in such Zone.”
The relevant part of form ‘I’ is reproduced below for ready reference:
It can be seen that the ‘I’ form can be for sales made against one purchase order of the customer. There is no provision for clubbing more than one purchase order in one ‘I’ form. This position can be compared with Rule 12(1) about issue of ‘C’ forms. The said Rule is reproduced below for ready reference.
“12. (1) The declaration and the certificate referred to in Ss. (4) of section 8 shall be in Forms C and D, respectively; [Provided that Form C in force before the commencement of the Central Sales Tax Registration and Turnover (Amendment) Rules, 1974, or before the commencement of the Central Sales Tax Registration and Turnover (Amendment) Rules, 1976, may also be used up to the 31st December, 5 [1980], with suitable modifications:]
Provided further that a single declaration may cover all transactions of sale, which take place in a quarter of a financial year between the same two dealers.”
It can be seen that under this rule, the sale transactions effected in one quarter can be included in one ‘C’ form. This suggests that although the ‘C’ forms are supposed to be against each sale, however, by giving specific provision, it is provided that the sales transactions in a quarter can be included in one ‘C’ form.
In Rule 12(11) of CST (R & T) Rules, 1957, about ‘I’ form, there is no such provision allowing clubbing of transactions of one quarter in one ‘I’ form. In absence of the same, the natural outcome will be that against each sale, one ‘I’ form will be required. This position also gets confirmed by prescription in body of ‘I’ form. The form itself specifies that all the sale bills against one purchase order can be included in one ‘I’ form. It is a fact that one purchase order is one transaction. There can be more than one delivery in relation to such purchase order and accordingly more than one sale bill also may be prepared. However, it will be considered to be one transaction and therefore the form includes all the sale bills against one purchase order to be included in one ‘I’ form.
Howsoever, there is no facility to include more than one purchase order in one ‘I’ form, though they may be within one quarter. Therefore, the position is for one purchase order one ‘I’ form is required.
It is also a fact that if the declaration forms are not as per the provisions of the Rules, they are considered to be invalid. There are number of judgments wherein it is held that the procedure regarding issue of declaration forms should be strictly followed, lest the forms will be invalid and the claim may not be allowed. Reference can be made to judgment in case of India Agencies (Regd.) v. Additional Commissioner of Commercial Taxes, Bangalore, (139 STC 329) (SC). Supreme Court has observed as under:
“(1) The dealer has to strictly follow the procedure and produce the relevant materials required under that Rule. Without producing the specified documents as prescribed thereunder a dealer cannot claim the benefits provided u/s. 8 of the Central Sales Tax Act, 1956.
(2) Section 8(4)(a) of the Central Sales Tax Act, 1956, specifically provides that the provisions of Ss. (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 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.”
Therefore, the legal position appears to be clear that unless the form is as per relevant Rule it will not be valid and will not be allowable. Thus, in respect of ‘I’ forms special care is required to be taken that they are per transaction and not on quarterly basis.
