Sri Veera Venkata Satyanarayana Modern Rice Mill v. Commercial Tax Officer & Ors.

What happened

The petitioners were dealers who had been served with memos or assessment orders for not producing Form H, the declaration given by an exporter to whom they sold goods and needed to claim that the last sale before export is itself a sale in the course of export under section 5(3) of the Central Sales Tax Act, 1956. The challenged orders were mostly memos dated 30 April 2016 and assessment orders for years including 2011-12 to 2015-16, passed between 2015 and 2025.

Some Division Benches of the Court, in W.P. No. 1466 of 2017, W.P. No. 16718 of 2019, W.P. No. 12450 of 2019 and W.P. No. 18205 of 2020 and batch, had directed that Form H be considered on a footing similar to Forms C and F, following Godrej Agrovet Ltd. v. Commercial Tax Officer, Eluru. Another Division Bench, by order of 22 January 2025 in W.P. No. 7158 of 2018 and batch, observed that Rule 12(10) has no provision like Rule 12(7) and that its time limit appeared absolute, but referred the question to a Full Bench because of the earlier decisions; a further batch beginning with W.P. No. 30640 of 2016 was referred by order of 29 January 2025.

Questions before the court

• Does the period of three months after the end of the relevant period, allowed by Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 for Forms C and F, apply also to Form H? Alternatively, must Form H be furnished before the completion of assessment, where the State has made no rules on Form H?

Why the court ruled this way

The petitioners argued that Article 286 of the Constitution aims to keep export sales outside sales tax, that section 5(3) was inserted after the Supreme Court's decision in Coffee Board v. Joint Commercial Tax Officer, that Rule 12(10)(b) makes the rules on Form C apply to Form H, including Rule 12(7), and that because the State had made no rule under section 13(3) on Form H, the maxim lex non cogit ad impossibilia applied. The State argued that Rule 12(10)(a) is self-contained on time and that the later-filing benefit given to Forms C and F could not be extended to Form H without State rules under section 13(3) to (5).

The Court noted that neither the form nor the procedure for export sales under section 5 is prescribed in the State's rules. Rule 12(10)(a) says that the declaration in Form H "shall be furnished to the prescribed authority upto the time of assessment by the first assessing authority", while Rule 12(7) lets the authority permit Forms C and F within a further time for sufficient cause. Rule 12(10)(b) saves the State rules on the authority from whom the form is obtained, the conditions, custody, records, manner of use and furnishing, but says nothing about time. So there is no conflict between clauses (a) and (b): clause (a) alone governs time. Even assuming the State's rules were made under section 13, none indicates a time for Form H, and section 13(3) permits State rules only if not inconsistent with the Act and the central rules.

Controlling point

With regard to time, Rule 12(10)(a) alone applies to Form H; Rule 12(7) does not extend to it, and Rule 12(10)(b) cannot be used to give Form H parity with Forms C and F.

Order and next steps

The reference was answered as stated and all the writ petitions were disposed of in those terms. There was no order as to costs.

Practical implications

A dealer who sells goods to an exporter and expects to claim the benefit of section 5(3) should collect the exporter's Form H before the first assessment is finished, and keep a dated follow-up record of requests to the exporter. Forms C and F may be accepted later on sufficient cause, but a dealer cannot assume the same latitude for Form H.

Limits of this ruling

• The Full Bench answered the question on the Central Sales Tax Rules as they apply in Andhra Pradesh; it did not decide the merits of any petitioner's claim or whether an exporter's failure to issue the form can be excused in some other way.