PETITIONER:
COMMISSIONER OF SALES TAX A
Vs.
RESPONDENT:
PRABHUDAYAL PREM NARAIN
DATE OF JUDGMENT26/07/1988
BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
RANGNATHAN, S.
CITATION:
1988 AIR 1775 1988 SCR Supl. (1) 583
1988 SCC Supl. 729 JT 1988 (3) 542
1988 SCALE (2)306
ACT:
U.P. Sales Tax Act 1948/U.P. Sales Tax Rules, 1948.
Section 3D(7)(b)/Rule 12B & Notification No. ST-111-2712-
Exemption from tax-Dealer entitled to claim only when
declaration forms furnished.
HEADNOTE:
The respondent a dealer in pulses, claimed exemption
under s. 30(2) of the U.P. Sales Tax Act, 1948 for the
assessment year 1977-78 contending that the purchases
affected by him prior to 1.5.1977 could not be subject to
tax. The assessing authority and the Assistant Commissioner
(Judicial) rejected the assessee's claim for exemption from
tax. D
on appeal, the Tribunal was of the view that since the
assessee had not furnished Form IlI-C(I), he was not
entitled to any exemption under s. 3-D of the Act.
The High Court allowed the revision petition on the
ground that as the Tribunal had not gone into the proof
furnished by the assessee before the assessing authority and
the Assistant Commissioner (Judicial) in support of his
claim for exemption, and remitted the matter back to the
Tribunal, directing it to consider the question whether the
dealer was entitled to get any exemption on the basis of the
evidence that he had furnished.
In the appeal to this Court, it was contended on behalf
of the Revenue-appellant that the High Court was wrong
because, in view of s. 3D(7-B) of the Act the assessee was
not entitled to lead any other evidence apart from
submitting the registered dealer Form No. III-C(2).
Allowing the Appeal,
^
HELD: 1. The High Court was in error in directing the
Tribunal to consider the matter on further evidence. The
assessee is entitled to exemption only on furnishing the
declaration forms. Since he did not do so, he is not
entitled to the exemption. [586E]
584
2. Under section 3-D(7) declaration forms have been
prescribed by Rule 12-B. The provision should be construed
as mandatory. If the dealer had not furnished the required
declaration forms in order to be entitled for exemption, he
cannot file any other evidence which he re quires to be
considered by the axing authorities[1586D].
Kedar Nath Jute Mfg. Co. Ltd. v. Commercial Tax Officer
JUDGMENT:
M/S Govind Ram Tansukh Ram Tansukh Rai & Co. Budaun v.
Commissioner of Sales Tax, U. P., [1985] UPTC 1960,
approved.
Abdul Ghani Banne Khan v. CST., 1982 UPTC 665, over-
ruled.
&
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2506(NT)
of 1988.
From the Judgment and order dated 18-8- 1982 of the
Allahabad High Court in S.T.R. No. 89 of 1982.
S.C. Manchanda, R.S. Rana and A.K. Srivastava for the
Petitioner.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. Notice was issued on this
special leave application stating that the matter would be
disposed of finally at the notice stage itself. None has
appeared pursuant to the notice. We have considered the
matter and heard Shri Manchanda, counsel for the petitioner.
Special leave is granted and the appeal is disposed of by
the judgment herein.
This appeal arises from the judgment and order of the
High Court of Allahabad, dated 18th August, 1982. The said
judgment was delivered on a revision application filed
before the High Court. The application related to the
assessment year 1977-78 under the U.P. Salex Tax Act. The
first question involved before the High Court of Allahabad
was whether the purchase of pulses effected by the assessee
prior to 1.5.1977 could be subjected to tax under Section
30(2) of the Sales Tax Act. The Tribunal held that these
could be so subjected.
The High Court referred to the Notification No. ST-III-
2712/X-
6(2)-77 U.P. Act XV-48-order-77 and held that the
contention of the
585
assessee could not be accepted that he had purchased the
pulses in question before 1st May, 1977. There was no
dispute on this contention raised subsequently. The only
contention that was urged before the High Court was that the
Asstt. Commissioner (Judicial), was about granting relief to
the assessee in respect of his turnover on pulses of
Rs.3,75,500 to the extent of Rs.3,19,673 on the basis of
certain evidences that had been produced before the
assessing authority and the Asstt. Commissioner. The
Tribunal was of the view that since the assessee had not
furnished From IIl-C(1), he was not entitled to any
exemption under Section 3-D of the Act. It appears that in
the case of Abdul Ghani Banne Khan v. CST, [1982] UPTC 665,
a learned Single Judge of the High Court of Allahabad held
that on the language of Section 3D(7-b), the assessee was
entitled to lead evidence to the satisfaction of the
assessing authority that the sale was made to a registered
dealer and was not confined only to furnishing form IIIC(2).
There was, however, an earlier decision to the contrary in
the case of Commissioner of Sales Tax v. Kailash Trading
Co., [1981] UPTC 82 1 of the same Court which has been
referred to in this case.
In the judgment under appeal the High Court was of the
view that as the Tribunal had not gone into the proof
furnished by the assessee before the assessing authority and
the A.C. (J) in support of his claim for exemption which
according to the decision in Abdul Ghani Banne Khan (supra),
should be examined by the Tribunal, it remitted the matter
to the Tribunal. In the premises the High Court allowed the
revision and remitted the matter back to the Tribunal and
directed it to consider the question whether the dealer was
entitled to get any exemption on the basis of the evidence
that he had furnished. According to the appellant the
revenue, here the High Court was wrong because in view of
Section 3D(7-b) of the Act, he was not entitled to lead any
other evidence apart from submitting to the registered
dealer Form No. III-C(2). Clause (b) of sub-section (7) of
Section 3-D provides as follows:
“Every sale within Uttar Pradesh by a dealer
either directly through another, whether on his
own account or on account of any one else. shall,
for the purposes of subsection (2), be deemed to
be a sale to a person other than a registered
dealer, unless the dealer selling the goods proves
otherwise to the satisfaction of the assessing
authority after having furnished such declaration
or certificate, obtained from the purchaser of
such goods, in such form and manner and within
such period, as may be prescribed.”
586
Under the said Section, declaration forms have been
prescribed by Rule 12-B. It appears that this question
stands concluded so far as the U.P. is concerned, by a Bench
decision of the said High Court in the case of M/s. Govind
Ram Tansukh Ram Tansukh Rai & Co. Budaun v. Commissioner of
Sales Tax, U.P., [1985],1060. There, after considering the
aforesaid two decision of the learned Single Judges, the
Division Bench held that if the assesses had not furnished
the required declaration forms in order to be entitled tor
exemption, the assessee could not file any other evidence
which required to be considered by the taxing authorities.
In that view of the matter the decision of the Division
Bench must prevail. This also follows logically from the
decision of this Court in Kedar Nath Jute Mfg. Co. Ltd. v.
Commercial Tax officer & Ors.,16 STC 607, where this Court
while dealing with similar provisions under the Bengal
Finance Sales Tax Act, held that the dealer could claim
exemption on the sales to the registered dealer by
furnishing the declaration form and unless such declaration
forms are furnished, the dealer was not entitled to any
exemption. This Court further reiterated that the provisions
of this nature should be construed as mandatory. [n that
view of the matter there is no scope for taking any contrary
view. In the premises, the High Court in the impugned order
was in error hi directing the Tribunal to consider the
matter on other evidence. The assessee is entitled to
exemption only on furnishing declaration forms. Since the
assessee did not do so, he was not entitled to exemption.
The appeal is allowed and the decision of the High
Court is set aside and the order of the Tribunal is
restored. There will be no order as to costs.
N.V.K. Appeal allowed.
587