http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 9  

PETITIONER: PHOOL CHAND GUPTA

       Vs.

RESPONDENT: STATE OF ANDHRA PRADESH

DATE OF JUDGMENT:       21/01/1997

BENCH: SUJATA V. MANOHAR

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T      Ahmadi, CJI.      These two  appeals  arise  out  of  a  common  judgment delivered on 14.8.1978 by a Division Bench of the High court of Andhra  Pradesh whereby it repelled the contention of the appellant firm that Rule 12(3) (ii) of the Central Sales Tax (Andhra Pradesh)  Rules was  directory and not mandatory and if held  to be  mandatory the  said rule was ultra vires the Central Sales Tax Act, 1956, hereinafter called ’the Act’.      The appellant,  M/s. Phool  Chand  Gupta,  was  at  all material times a dealer in oil seeds. This firm was assessed under the  Act by  the Commercial Tax Officer, Vizianagaram, for the  relevant assessment  year 1971-72  and 1972-73.  He granted exemption on a turnover in respect of mohwa seeds on the plea  that the seeds were purchased by the firm while in transit and  were sold  to dealers  outside the  State.  The Deputy Commissioner,  however, noticed that the assessee had actually purchased  the Railway  Receipts  relating  to  the mohwa seeds  from non-resident  dealers while the goods were in transit  from places  outside the  State and were sold to non-resident  dealers.   He,  therefore,   opined  that  the exemption granted  was irregular  since the transaction fell within Section 3(b) and hence was not eligible for exemption in view  of Section  6(2)  of  the  Act  unless  the  dealer furnished a certificate in Form E-1 obtained from the vendor and a  declaration in  form C  received from  the registered dealer to  whom he sold the goods. Since no document in Form C was  furnished, it  was held  that the  assessee  was  not entitled to  exemption. The  Deputy commissioner, therefore, withdrew the  exemption allowed by the Assessing Officer. In appeal the  Sales Tax  Appellate Tribunal affirmed this view since the  requirement of  Rule 12(3)  (ii) of  the  Central Sales Tax  (Andhra Pradesh)  Rules (hereinafter  called ’the State Rules’),  was  not  satisfied.  The  High  Court  also approved the said point of view.      The High  Court noticed  that the  appellant  firm  had purchased mohwa  seeds from  a dealer in the State of Orissa and while  the consignment  was in transit, it sold the same to a  dealer in West Bengal by endorsing the Railway Receipt for that  consignment. Thus,  there is  no dispute  that the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 9  

transaction took  place in  the course  of inter-State trade falling within  the scope of Section 3(b) of the Act. On the turnover of  these seeds exemption was claimed under Section 6(2) of  the Act  which was  denied by the authorities since rule 12(3) (ii) was not complied with. Before the High Court it was contended that the said rule was merely directory and not mandatory  and that if it was construed to be mandatory, it would  be ultra vires the provisions of the Act. The High court negatived both these contentions and hence the present appeals by special leave.      We may  at the  outset notice a few relevant provisions of the  Act as  they stood  at the  material time. Section 3 provides that a sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale  or purchase  occasions the  movement of goods from one State  to another;  or is  effected  by  a  transfer  of documents of  title to  the goods during their movement from one State  to another.  Section 6 imposes a liability to tax on inter-State  sales. Sub-section (1) provides that subject to the  other provisions  in the  Act, every dealer shall be liable to  pay tax on all sales of goods other than electric energy effected by him in the course of inter-State trade or commerce during any year on and from the notified date. Sub- section (2) as it stood before 1.4.1973 read as follows:      "6(2)   Notwithstanding    anything      contained  in  sub-section  (1)  or      sub-section (1A)  where a  sale  in      the course  of inter-State trade or      commerce   of    goods    of    the      description  referred  to  in  sub-      section (3) of section 8 --      (a) has  occasioned the movement of      such  goods   from  one   State  to      another; or      (b) has been effected by a transfer      of documents of title to such goods      during  their   movement  from  one      State to another;      any subsequent sale to a registered      dealer   during    such    movement      effected by a transfer of documents      of title to such goods shall not be      subject to tax under this Act:      Provided that  no  such  subsequent      sale shall be exempt from tax under      this sub-section  unless the dealer      effecting the sale furnishes to the      prescribed   authority    in    the      prescribed  manner   a  certificate      duly  filled   and  signed  by  the      registered  dealer  from  whom  the      goods  were  purchased,  containing      the prescribed particulars."      After its amendment with effect from 1.4.1973, the said sub-section reads as under:      "6(2)  Not   withstanding  anything      contained  in  sub-section  (1)  or      sub-section (1A)  where a  sale  of      any goods  in the  course of inter-      state trade  or commerce has either      occasioned  the  movement  of  such      goods from  one State to another or      has been  effected by a transfer of      documents of  title to  such  goods      during  their   movement  from  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 9  

    State to  another,  any  subsequent      sale during  such movement effected      by a transfer of documents of title      to such goods, --      (A) to the Government, or      (B) to  a registered  dealer  other      than the  Government, if  the goods      are of  the description referred to      in sub-section  (3) of  section  8,      shall be exempt from tax under this      Act:      Provided that  no  such  subsequent      sale shall be exempt from tax under      this sub-section  unless the dealer      effecting that  sale  furnishes  to      the  prescribed  authority  in  the      prescribed manner  and  within  the      prescribed  time   or  within  such      further time as that authority may,      for sufficient cause, permit, --      (a) a  certificate duly  filled and      signed  by  the  registered  dealer      from whom  the goods were purchased      containing      the      prescribed      particulars in  a  prescribed  form      obtained   from    the   prescribed      authority,   and    (b)   if    the      subsequent sale is made --      (i)  is   a  registered  dealer,  a      declaration referred  to in  clause      (a) of  sub-section (4)  of section      8, or      (ii) to the Government, not being a      registered to in clause (b) of sub-      section (4) of section 8:      Provided further  that it shall not      be   necessary   to   furnish   the      declaration  or   the   certificate      referred to  in clause  (b) of  the      preceding proviso  in respect  of a      subsequent sale of goods if, --      (a) the  sale or  purchase of  such      goods is,  under the  sales tax law      of the  appropriate  State,  exempt      from tax generally or is subject to      tax generally  at a  rate which  is      lower than  [four per cent] whether      called a tax or fee or by any other      name; and      (b)  the   dealer  effecting   such      subsequent  sale   proves  to   the      satisfaction   of   the   authority      referred  to   in   the   preceding      proviso that  such sale  is of  the      nature referred to in clause (A) or      clause (B) of this sub-section."      Incidentally,  the  proviso  to  sub-section  (1)  also underwent change  with effect  from  1.4.1973  and  read  as under:      "Provided that  a dealer  shall not      be liable to pay tax under this Act      on  any  sale  of  goods  which  in      accordance with  the provisions  of      sub-section (3)  of section 5, is a      sale in  the course  of  export  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 9  

    those goods out of the territory of      India."      Section 13  empowers the  Central  government  to  make rules, providing for      "(b) the  form  in  which  and  the      particulars to  be contained in any      declaration of  certificate and the      time   within    which   any   such      certificate or declaration shall be      produced or furnished."      We may now turn to Rule 12(1) of the Central Government Sales tax (Registration and Turnover) Rules, 1957 which lays down that  the declaration and certificate referred to shall be in  forms ’C’  and ’D’,  respectively. Sub-rule  (4) next provides that  the certificate  referred to  in section 6(2) shall be in Form E-I or E-II as the case may be.      Next, we  may reproduce  rule 12(3)(ii)  of  the  State Rules. it reads:      "Rule 12(3)(ii)  - For the purposes      of claiming  exemption from  tax on      his  subsequent   sale  under  sub-      section  (2)   of  Section  6,  the      purchasing  dealer  who  effects  a      subsequent    sale    to    another      registered dealer  by  transfer  of      documents of  title  to  the  goods      during  their   movement  from  one      State to  another, shall furnish to      the appropriate assessing authority      (i) the  portion marked  ’original’      of the  form E-1  received  by  him      from the  registered   dealer  from      whom he purchased the goods, and      (ii)   the    original    of    the      declaration in form C received from      the registered  dealer to  whom  he      sold the goods."      On a  conjoint reading  of the  various sub-sections of Section 8  it appears  that the  concessional rate  of three percent of  the turnover  is admissible  on all  inter-State sales when  the goods  in question  are of  the  description referred to  in sub-section (3). Thus, the concessional rate prescribed under  sub-section  (1)  is  available  to  goods described under  sub-section (3).  However, sub-section  (4) requires  the   dealer   claiming   the   benefit   of   the concessional  rate   prescribed  under  sub-section  (1)  to furnish to the prescribed authority in the prescribed manner a declaration  dully filled  and signed  by  the  registered dealer to  whom the goods are sold containing the prescribed particulars  in   the  prescribed  form  obtained  form  the prescribed under  the rules  and unless  this certificate is produced as  required by  sub-section  (4),  the  concession under sub-section (1) will not be available.      Turning now  to Section  6(2)  it  is  clear  that  the exemption granted  thereunder is  also available  as in  the case of  Section  8(1)  to  the  goods  of  the  description referred to  in sub-section (3) of Section 8. While granting the exemption  certain conditions  prescribed  by  the  sub- section have  to be  met. These  are (i)  the sale must be a second or  subsequent sale  effected in the course of inter- state trade,  (ii)  it  must  be  effected  by  transfer  of documents of  title while the goods are in movement from one State to  another, (iii)  it must  be in respect of goods of the description  in Section  8(3), (iv) it must be in favour of a  registered dealer  and (v)  the seller  too should  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 9  

shown to  have purchased the goods from a registered dealer. Thus, it  seems clear to us that the concessional rate under Section 8(1)  and the  exemption  for  the  subsequent  sale provided by  Section 6(2)  are, in both cases, in respect of goods of  the description referred to in Section 8(3) of the Act. While in the case of a sale governed by Section 8, sub- section (4) thereof requires the production of a certificate in form  ’C’, in  the case  of  the  subsequent  sale  under Section 6(2)  the benefit of the exemption can be availed of only if  the dealer  effecting the  sale  furnishes  to  the prescribed authority  a certificate  as  postulated  by  the proviso thereto as it stood before 1.4.1973.      Form ’C’ has been prescribed under rule 12 of the Rules by the  Central Government  to satisfy  the  requirement  of Section 8(4)  and similarly  to satisfy  the requirement  of Section 6(2), rule 12(3)(ii) of the State Rules provides for the production  of the declaration in Form ’C’ received from the registered dealer to whom the goods were sold. Of course under the  central  Rules,  sub-rule  (4)  of  Rule  12  the certificate referred  to must  be in Form ’E-I’ or ’E-II’ as the case  may be.  It is  the requirement of furnishing Form ’C’ under  rule 12(3)(ii)  of the  State rules  which is the bone  of  contention  in  the  present  proceedings.  It  is contended that if this rule is not construed to be directory in character, it will be ultra vires the Act.      It is  true that  while the  proviso to Section 6(2) of the Act  imposes the  liability of production of Form ’E-J’, Rule 12(3)(ii)  of the  State Rules  imposes the  additional requirement of  filing Form  ’C’ as  well.  As  pointed  out earlier to secure exemption under Section 6(2), proof of the subsequent sale  is a  sine qua  non. Unless  the subsequent sale to  a registered  dealer in  the course  of inter-State trade of commerce of goods of the description referred to in Section 8(3)  is shown to have been effected by the transfer of documents  of title  to such  goods, there  could  be  no question of grant of exemption from payment of tax. In order to claim and secure exemption, this fact has to be proved by the production of Form ’E-I’ under rule 12(4) of the Central Rules and Form ’C’ under Rule 12(3)(ii) of the State Rules.      We may  now consider the challenge to the vires of Rule 12(3)(ii) of  the State  Rules. It,  in no  uncertain terms, says that  for claiming exemption from tax on his subsequent sale under Section 6(2), the purchasing dealer effecting the subsequent sale  to another registered dealer by transfer of documents  of   title  to  goods  during  their  inter-state movement,  ’shall’  furnish  to  the  appropriate  assessing authority  Form  ’E-I’  received  by  him  from  the  vendor registered dealer,  and the  original of  the declaration in Form ’C’  received from  the registered  dealer to  whom the goods came  to be  sold. It  must be   remembered that it is implicit from  the plain  language of Section 6(2), proviso, that the  seller too  must be  a registered dealer. In other words, the  sale must  be  form  one  registered  dealer  to another registered  dealer. This  fact can  be proved by the production of  Form ’C’ declaration. The production of these certificates would  provide the  required proof for claiming and securing  the  exemption  provided  in  respect  of  the transaction under  Section 6(2)  of the  Act. Was  the State Government empowered  in law  to frame  Rule 12(3)(ii)?  The answer to  this question  must depend  on whether or not the Act empowers the State Government to frame such a rule.      Section 13  provides for  the rule  making power.  Sub- section (1) of Section 13 empowers the Central Government to make rules providing inter alia prescribing (d) ’the form in which the  particulars to be contained in any declaration of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 9  

certificate and  the time  within which any such certificate or declaration shall be produced or furnished’. It should be remembered that  Form C is prescribed under this rule making power by  the Central  Government. Form ’C’ is, therefore, a form prescribed  by the Central Government and not the State Government. Next,  Section 13(3)  provides  that  the  State Government  may   make  rules,  not  inconsistent  with  the provisions of  the Act  and the Rules made under sub-section (1), to  carry out  the purposes of the Act. Sub-section (4) of Section  13 next  provides that in particular and without prejudice to  the powers  conferred by  sub-section (3), the State Government may frame rules for the purposes enumerated therein. The  High Court  has placed  reliance on clause (c) which reads as under:      "(c)   The    furnishing   of   any      information relating  to the stocks      of goods  of, purchases,  sales and      deliveries of  goods by, any dealer      or any  other information  relating      to his business as may be necessary      for the purposes of this Act."      Section  13(3)   confers  wide   powers  on  the  State Government to  make rules  to carry  out the purposes of the Act, provided  the said  rules are not inconsistent with the Act and  the Rules  framed  by  the  Central  Government  in exercise of  power conferred  by sub-section  (1) of Section 13. Without  prejudice to  this power,  the State Government may make  rules for  all or any of the matters enumerated in sub-section (4)  thereof which includes the matter in clause (c) extracted  earlier. A provision requiring the production of the  declaration in Form ’C’ for receiving the benefit of exemption under  Section 6(2)  does not  run counter  to any provision in  the Act  or the  Central Rules and seems to be within the  scope and  ambit of  the rule making power under Section 13(3)  as well  as within  the specific provision in clause (c) of Section 13(4) which empowers the making of any rule which  requires the  furnishing of information relating to purchases, sales and delivery of goods by any dealer. The requirement of  the production  of Form ’E-I’ cannot be said to be  inconsistent with  the Act or the Central rules. That is because  Section 6(2) applies to goods of the description in Section  8(3). The  Act prescribes  the mode of proof for the purpose  of Section  8(1) (b) but does not prescribe any mode of  proof for  the purpose  of Section 6(2) of the Act. How then  can Rule  12(3)(ii) be  said  to  be  ultra  vires Section 6(2)  of the  Act? All that the State government has done is to accept the same mode of proof for the purposes of Section 6(2)  since the  latter provision  is silent  on the point. We  are, therefore,  in agreement with the High court that rule  12(3) (ii)  of the State rules is not ultra vires the Act or the Central Rules.      The second  limb of  the submission  is that unless the said Rule  12(3) (ii) is construed as directory, it would be ultra vires  the Act  should not  detain us.  The use of the expression ’shall furnish’ would indicate that the choice in regard to  production is  limited to  furnishing the portion marked ’original’ of form ’E-I’ and the original declaration in Form  ’C’.  If  exemption  from  tax  is  sought  on  the subsequent sale  under Section  6(2), the  purchasing dealer must produce the documents mentioned in clauses (i) and (ii) of the  Rule 12(3)  (ii) of the Rules. The rule deliberately restricts  itself   to  the   production  of  the  specified documents as  that would  be the  best possible  evidence in regard to subsequent. sale under Section 6(2) by transfer of documents of  title to  the  goods.  To  permit  substantial

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 9  

compliance would  introduce  uncertainty  and  may  lead  to avoidable litigation.  In order  to avail  of the concession granted under Section 8(1) (b) of the Act, the dealer has to prove the  fact  that  the  goods  are  of  the  description mentioned under  Section 8(3)  by furnishing the declaration in Form  ’C’ and  in no  other manner.  So also, in order to claim the benefit under Section 6(2), the very same fact has to be  proved and  if the  State Government  adopts the same mode of proof, it is impossible to say tat the mode of proof adopted is  inconsistent with  the  provisions  of  the  Act and/or the  Central Rules. All that the State Government has done is  to fill  the gap  left by Section 6(2) in regard to the mode  of proof  that the goods are of the description of Section 8(3) of the Act. It was open to the State Government to  select  the  mode  of  proof  accepted  by  the  Central Government  as   the  exclusive   mode  of  proof  to  avoid uncertainly and  avoidable litigation.  If the  provision is held to  be directory, substantial compliance would suffice. That would  permit the  dealer to  adopt any  other mode  of proof. It  would be  for the  authorities to  accept  it  as sufficient or  to reject it. If the authorities reject it as insufficient, it would lead to avoidable litigation. It was, therefore, open  to  the  State  Government  to  accept  the recognised mode  as the  exclusive mode  of proof  to  avoid disputes on  the sufficiency  or otherwise  of the proof and also to  make the  process of  granting exemption  easy  and uniform. Such a rule must be held to be within the scope and ambit of  Section 13(3)  read with  Section 13(4) of the Act and not inconsistent with the Act or the Central Rules.      This is  the view  taken by  the High  Court under  the impugned decision  based on  the view  taken  by  a  learned Single  Judge  of  the  same  High  Court  in  the  case  of Govindarayulu &  Brothers v. S.T. Appellate Tribunal, Andhra Pradesh (1974)  33 STC 580. However, our attention was drawn to the  decisions of  the Madras, Gujarat and Madhya Pradesh High Courts  which have  taken a  different  view.  We  will briefly deal  with these  cases. In the case of the State of Madras v.  P. Subbiah  Pillai (1967)  20 STC  263, the Court held that  Section 6(2)  imposed  only  the  requirement  of production of  form ’E-1’  for availing  the  exemption  and there was  no indication  in the  said  provision  regarding production of  Form ’C’. Therefore, any rule made compelling the production  of Form  ’C’ by  the State  Government would tantamount to adding a condition not imposed by Section 6(2) and would be outside the scope of Section 13, in particular, Section 13(4)  of the  Act. However,  the High Court did not examine the  impact of  Section 8  of  the  Act  but  merely confined itself  to the  language of Section 6(2) nor did it appreciate the purpose for the requirement of Form ’C’ under the Central  rules. The Division Bench of the High court did not bear  in mind  the entire  scheme of  the  Act  and  the Central  Rules  and  therefore,  in  our  view,  reached  an incorrect conclusion.  The High Court of Gujarat in the case of State  of Gujarat  v. Yakubhai  Haji Hakumutdin (1969) 23 STC 117  has taken the view that the scheme of the Act shows that Section  6 is  the charging  Section  which  fixes  the liability of the tax on inter-State sales. Under sub-Section (1) thereof  every dealer  has to  pay the  tax on all sales effected by  him in  the  course  of  inter-State  trade  or commerce    while    sub-section    (2),    which    applies notwithstanding sub-section  (1), grants  and exemption from the liability  to  pay  tax  if  the  conditions  stipulated thereunder  are  met.  The  proviso  merely  prescribes  the condition in  regard to the production of Form ’E-1/E-2’ but nowhere  provides   for  the  production  of  Form  ’C’  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 9  

therefore such  an additional  requirement is not consistent with Section  6(2) of the Act. In fact, the learned Advocate Genera  for  the  State  tried  to  contend  that  unless  a declaration in Form ’C’ was produced, there would be nothing to show  that goods  fell within  the description of Section 8(3). Since the question referred to the Court was a limited one, namely,  whether the  want of a certificate in Form ’C’ from the  purchaser disentitled  the assessee  from claiming exemption under  Section 6(2),  and since  the  question  of production of certificate in Form ’C’ must be limited to the requirements of  concession under  Section 8 of the Act, the learned Advocate  General was  not allowed to urge the point holding that  it was a new point travelling beyond the scope of the  reference. In  reaching the  conclusion it  did, the ratio of the Madras case was accepted as correct. The Madhya Pradesh  case,     Commissioner   of  Sales  Tax,  M.P.,  v. Shivanarayn Jagatnarayn  (1978) 42 STC 315, follows the line of reasoning  adopted by the Madras and Gujarat High Courts. Dealing with  the decision  of the Andhra Pradesh High Court in the  case of Govindarayulu (supra), the Division Bench of the High  Court distinguished it on the ground that it arose out of  a writ  petition challenging the validity of similar rule framed  by the State Government requiring production of Form ’C’  to claim  exemption under Section 6(2) of the Act. That was,  therefore, a  case in  which the  validity of the rule was  questioned. Since  no such  question arose  in the case on  hand and  since the  Court had  presumed it  to  be valid, the Andhra Pradesh High Court decision was held to be clearly distinguishable.  It was,  therefore, held  that the rule was directory and not mandatory.      From the aforesaid decisions of the Madras, Gujarat and Madhya Pradesh  High Courts,  it seems clear to us that they upheld the  validity of  a similar  provision but  held that insofar as  its application  to claims  for exemption  under Section  6(2)   is  concerned,   it  is  directory  and  not mandatory. This  view is  based on  the premise that Section 6(2) requires  the production  of a  certificate in Form ’E- 1/E-2’ and not a declaration of certificate in Form ’C’. The requirement of  Form ’C’  is therefore  in addition  to  the requirement under Section 6(2) and can only be directory and not mandatory.  But what is overlooked is the fact that even under Section  6(2),  the  dealer  claiming  exemption  from payment of tax has to show that the goods in question are of the description  set out in Section 8(3). Even under Section 8(4), it  is stated  that sub-section (1) shall not apply to any sale  in the  course of  inter-State trade  or  commerce unless  the  dealer  selling  the  goods  furnished  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.  Therefore, even  this  provision  requires that the  particulars referred  to in  Section 8(3)  must be contained and  furnished in  a prescribed  form.  As  stated earlier, Form ’C’ is prescribed under Rule 12 of the Central Rules and  not under  the  State  Rules.  In  a  case  where concession is claimed under Section 8(2)(b), the dealer must produce a  certificate in  Form ’C’  to prove that the goods are of  the description  mentioned in  Section 8(3).  If the mode of  proof  for  claiming  a  concession  under  Section 8(2)(b) is  Form ’C’  to satisfy  the requirement of Section 8(3), no  exception can  be taken  if the  State  Government adopts the same for the purpose of proving the same fact for claiming exemption  under Section 6(2) of the Act. If such a rule made by the State Government is intra vires the Act and the Central Rules as held by all the High Courts, we fail to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 9  

see how it can be said that if that mode is made the sole or exclusive mode  of proof  in the  case of Section 6(2) also, the said  rule will  be rendered ultra vires the Act and the Central Rules.  Since the law provides for a total exemption from the payment of tax levied by Section 6(1), strict proof of the  basic fact  can  be  insisted  upon.  If  the  State Government, in  exercise of  its rule-making power under the Act, prescribes  that the  mode of  proof shall be Form ’C’, can it  be said  that such  a provision shall be ultra vires the Act  and the  Central Rules  unless it  is read  down as directory? If  the requirement  of proof  of that  very fact under Section 8)2) (b) read with 8(3) is Form ’C’ alone, and if that  provision  is  intra  vires,  it  is  difficult  to appreciate how  it becomes  ultra vires  when applied  under Section 6(2)  of Act.  If the  mode of  proof is left to the dealer to  choose, each  dealer may  choose his own mode and the concerned  authority would  be required  in each case to apply his  mind to each situation and come to an independent conclusion which  may on  the same  set of  facts very  from authority to  authority and  thus introduce  uncertainty and consequently lead  to avoidable  delay  and  litigation.  To avoid such  a situation,  if the State Government decided to restrict the mode of proof to one, namely, the production of Form ’C’,  it is  difficult to  see how the provision can be construed as  directory  as  such  an  interpretation  would destroy the  very purpose  of the  rule. We  are, therefore, inclined to  take the  view which  the High  Court of Andhra Pradesh took  in Govindarayulu’s  case and  which  has  been approved by the impugned decision.      Before we part, we must notice one observation found in the impugned  judgment. In Govindarayulu’s case, the learned Single Judge  referred to  the prescription of production of Form ’C’  as the exclusive mode of proof because he held the rule to  be mandatory.  While referring to this observation, the Division Bench in the impugned judgment observes:      "We have already made it clear that      while the  production of  Form C is      mandatory,   that    is   not   the      exclusive mode  of  proof  and  the      assessee  will  be  at  liberty  to      produce  in  addition  to  Form  C,      other evidence."      We must  at once  clarify that  this does not mean that Form ’C’  can be  substituted by  any other  evidence but is intended to  convey that  in addition  to Form  ’C’  if  the dealer desires  to produce  any other additional evidence he may do so. Such additional evidence may be a mere surplusage once Form ’C’ is produced.      In the  result, we  see no  merit in  these appeals and dismiss them  but in  view of the conflict of views, we make no order as to costs.