LexSTATE OF RAJASTHAN & ORS. versus COMBINED TRADERS
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[2025] 4 S.C.R. 816 : 2025 INSC 496 State of Rajasthan & Ors. v. Combined Traders (Civil Appeal No. 1208 of 2025) 16 April 2025 [Abhay S. Oka* and Ujjal Bhuyan, JJ.] Issue for Consideration Sub-rule (20) of Rule 17 of the Central Sales Tax (Rajasthan) Rules, 1957 provided that where any dealer had generated declaration forms or certificates by misrepresentation of fact or by fraud or in contravention of the provisions of the Central Sales Tax Act, 1956 [CST Act] and rules made thereunder, the assessing authority or any other authority authorised by the Commissioner after affording such dealer an opportunity of being heard, is empowered to cancel such declaration forms or certificates. By the impugned judgment, the High Court held that the first appellant-State had no rule-making power to frame a rule providing for the cancellation of validly issued declarations/forms. The High Court held that sub-rule (20) of Rule 17 of the Rajasthan Rules was ultra vires Sections 8(4), 13(1) (d), 13(3) and 13(4)(e) of the CST Act. The validity of sub-rule 20 of rule 17 of the Central Sales Tax (Rajasthan) Rules, 1957 was therefore in issue before this Court. Headnotes† Central Sales Tax (Rajasthan) Rules, 1957 – Sub-rule (20) of Rule 17 – Central Sales Tax Act, 1956 – ss.8(4), 13(1)(d), 13(3) and 13(4)(e) – High Court held that sub-rule (20) of Rule 17 of the Rajasthan Rules was ultra vires ss.8(4), 13(1)(d), 13(3) and 13(4)(e) of the CST Act – Correctness of: Held: The Central Government has the rule-making power to prescribe the form of declaration and lay down particulars to be contained in any declaration – Therefore, the form of declaration under Section 8(4) of the Central Sales Tax Act, 1956 and the contents thereof are to be provided by the rules framed by the Central Government in accordance with Section 13(1)(d) of the CST Act – If the State Government exercises the rule-making power * Author [2025] 4 S.C.R. 817 State of Rajasthan & Ors. v. Combined Traders under sub-section (3) of Section 13 by making rules providing for cancellation of a declaration in Form C as provided in Central Registration Rules, the State Rules will be inconsistent with the Central Registration Rules framed by the Central Government in exercise of power under Section 13(1)(d) of the CST Act – The State Government cannot frame rules in exercise of power under Section 13(3) which will be inconsistent with the rules framed by the Central Government in exercise of powers under Section 13(1) of the CST Act. No fault with the view taken by the High Court that sub-rule (20) of Rule 17 of the Rajasthan Rules is inconsistent with the Central Registration Rules framed in exercise of power under clause (d) of sub-section (1) of Section 13 of the CST Act. [Paras 12.1, 16, 18] Case Law Cited The State of Madras v. R Nand Lal & Co. [1967] 3 SCR 645 : (1967) (20) STC 374 (SC) : 1968 SCC OnLine SC 142 – relied on. Sales Tax Officer, Ponkunnam & Anr. v. K.I. Abraham [1967] 3 SCR 518 : (1967) (20) STC 367 (SC) : 1967 SCC OnLine SC 157 – referred to. Jain Manufacturing (India) Pvt Ltd v. Commissioner of Value Added Tax & Anr. (2016) (93) VST (326) (Delhi) : 2016 SCC OnLine Del 3656 – referred to. List of Acts Central Sales Tax (Rajasthan) Rules, 1957; Central Sales Tax Act, 1956. List of Keywords Sub-rule (20) of Rule 17 of Central Sales Tax (Rajasthan) Rules, 1957; Dealer; Declaration forms or certificates; Rule-making power; Cancellation of validly issued declarations/forms; Central Registration Rules; State Rules. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1208 of 2025 From the Judgment and Order dated 01.05.2019 of the High Court of Judicature for Rajasthan at Jaipur in DBCWP No. 11580 of 2018 818 [2025] 4 S.C.R. Supreme Court Reports Appearances for Parties Advs. for the Appellants: Dr. Manish Singhvi, Sr. Adv., Irshad Ahmad. Advs. for the Respondent: Rajesh Jain, Virag Tiwari, Rishabh Jain, Ramashish, Ms. Tanya Saraswat, Avadh Bihari Kaushik. Judgment / Order of the Supreme Court Judgment Abhay S. Oka, J. 1. The first appellant is the State of Rajasthan. A writ petition was filed before the High Court of Judicature for Rajasthan by the respondent-Combined Traders invoking jurisdiction of the High Court under Article 226 of the Constitution of India for challenging the validity of sub-rule (20) of rule 17 of the Central Sales Tax (Rajasthan) Rules, 1957 (for short, ‘the Rajasthan R
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