State of Rajasthan & Ors. Vs Combined Traders (Supreme Court of India)
Supreme Court held that State Government cannot frame rules in exercise of power under Section 13(3) of the Central Sales Tax Act, 1956 which will be inconsistent with the rules framed by the Central Government in exercise of powers under Section 13(1) of the Central Sales Tax Act [CST Act].
Facts- 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. Sub-rule (20) of Rule 17 was incorporated by way of an amendment with effect from 14th July 2014. Sub-rule (20) of Rule 17 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 and rules made thereunder, the assessing authority or any other authority authorized by the Commissioner after affording such dealer an opportunity of being heard, is empowered to cancel such declaration forms or certificates.
