C Form as a lien

No. issue of C Form is statutory obligation and it can't be retained for quality or any other reason. Issue a notice and lodge a complaint with the authorities.

Thanks Mr. Vasudevan.

Regards

Ranjan

Dear Mr.Rajan - As Mr.Vasudevan indicated the issue of "C" is a statutory conditions for inter-state transactions. But to have more clarity you need to indicated what are the terms of payment between the seller and your company for that particular transactions.  If payment is made before receing goods, you can take up the defective/bad quality of the material supplied immediately or within the reasonable period of 30 days of material receipt and in that even you can reject and return the goods, raise debit note for the value of goods and then you claim repayment of money paid and refuse to issue "C"FOrm. If you have paid the money for the value of goods on acceptance of material, you can not raise the point of quality of goods, when the party asks for "C" Form. Or even after your rejecting and return the material if the supplier fails to repay the amount paid by you, you can still demand money and refuse to issue "C" Form for the value of goods rejected.

But under any cirumstances, you can not raise the issue of quality of goods received when the supplier demands for "C" Form.  In fact some suppliers ask "C" Form also along with the purchase order.  To avoid this kind of difficulties your terms of purchase should be very clear.

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