TMI Blog2003 (10) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... ued forms in some cases that the alleged forms had not been issued to such dealer and in some cases the recognition certificate under section 4-B was cancelled prior to the date of transaction and in some cases the record of issuing dealer shows that the alleged forms had been issued to the different parties for different amount than the amount shown in the forms. On the basis of such information, proceeding under section 21 was initiated and the case had been reopened. The reopening of the case is not in dispute. During the course of proceedings under section 21, a show cause notice dated September 27, 1989 was issued. The said show cause notice was replied by the applicant. On the consideration of the show cause notice and its reply, the assessing authority vide its order dated September 30, 1989 passed the assessment order. The assessing authority had disallowed the claim of exemption against the forms III-B to the extent of Rs. 77,02,180 and levied tax at Rs. 4,85,237.35. The dealer filed appeal before the Deputy Commissioner (Appeal), Saharanpur which was allowed in part. The applicant filed second appeal before the Tribunal, Saharanpur, which was rejected. Being aggrieved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuted. Form in question was rejected because the form was issued to old firm for the assessment year Form III-Kha No. 289123 Disallowed amount. 5,592.38 1983-84 as well as the firm was reconstituted on April 1, 1984 and after April 1, 1984 the firm was not registered under section 4-B of Trade Tax Act, that is to say, that S/Sri Bhagwati Printing Press has issued invalid form III-Kha. 4. S/Sri Ratan Paper Convertors, Kanpur. The form III-Kha No. 115023 relating to the firm information was received from the assessing authority that this form has not been issued from the circle office. S/Sri Rattan Paper Converters and the registration of the firm was cancelled on January 9, 1984. In the assessment year 1984-85 the firm was not registered hence, the benefit of form III-Kha cannot be given. Form III-Kha No. 115023 Disallowed amount. 20,09,249. 5. S/Sri Kumar Packers, Meerut The form III-Kha No. 154525 was issued for Rs. 10,604 and for Rs. 8,344. An information was received that this form has been issued to dealer only for Rs. 10,604 and for rupees 8,344 another form No. 154526 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such which are printed and issued by the trade tax department and therefore, it is not the responsibility of the applicant-dealer to make any query while making purchases about the forms. When the forms were received it had a stamp and seal of the sales tax department and properly signed by the issuing dealer and therefore, it was bona fidely accepted. He further contended that merely because when the counter-foil was filed the dealer has filed different amount and has shown that the said form was issued to some different parties. The applicant cannot be held responsible because in two copies of the form, the amount of bill was clearly mentioned and the form was duly signed by the dealer which was issued form and therefore, for any mistake or misrepresentation made by the issuing dealer, the applicant cannot be held responsible. In the end, he submitted that for fault or the mistake committed by issuing dealer, necessary action should be taken under the provisions of the Act against such dealer and not against the applicant. In support of his contention, he placed reliance on the decisions of this Court in the case of Indra Steels Private Ltd., Ghaziabad v. Commissioner of Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary, that the particulars contained in the application are correct and complete, the fee referred to in subrule (3) has been paid and the security, if any, required to be furnished under sub-section (3) of section 4-B has been furnished by the dealer within the time and in the manner required by the Sales Tax Officer, he shall grant him a recognition certificate in form XIX for use at the principal place of the business and also furnish, free of cost, an attested copy of such certificate for every other place of business within the State, if any. (9) The Sales Tax Officer on his own motion, where he is satisfied that any of the events mentioned in sub-section (4) of section 4-B, has occurred, may, after giving the dealer a reasonable opportunity of being heard, cancel or amend the recognition certificate, as the case may be. (10) When the Sales Tax Officer cancels or amends the recognition certificate under sub-rule (8) or (9), he shall forthwith publish a notice in that behalf on the notice board of his office, stating therein the name, address and other particulars of the dealer whose recognition certificate is cancelled or amended, specify in the order of cancellation or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the said form III-B during the course of assessment proceedings. 9.. In the case of Commissioner of Sales Tax, U.P. v. Metal Cans, Kanpur reported in 1982 UPTC 858, fact of the case was that M/s. Metal Cans sold the tin containers to M/s. Jain Chemical Industries, Kanpur against form III-B. The claim of the exemption against said form III-B was refused by assessing authority in the case of M/s. Metal Cans on the ground that the sale was made in the year 1972-73 while in the recognition certificate issued to M/s. Jain Chemical Industries, Kanpur packing material was added w.e.f. May 26, 1975. The Tribunal has accepted the claim of exemption which was uphold by this Court. 10.. In the State of Madras v. Radio Electricals Ltd. [1966] 18 STC 222 (SC) a similar question had arisen before the Supreme Court in regard to the power of the assessing authority to decide whether the goods covered by a certificate of registration issued under the provision of the Central Sales Tax Act and the Rules framed thereunder, which entitled them to a concessional rate of tax, were rightly so included in the certificate of registration or not. The Supreme Court held that while it may be open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate had already been cancelled." 13.. The contention of the learned Standing Counsel that the furnishing of form III-A was not enough and the selling dealer has to prove to the satisfaction of the assessing authority that the sale was not made to a consumer, is not tenable. Section 3-AAA has to be interpreted in a reasonable manner as pointed out by the honourable Supreme Court in Chunnai Lal Parshadi Lal [1986] 62 STC 112. Unless it is shown that the declaration in form III-A was apparently "farzi" or there was collusion between the selling and the purchasing dealers, the furnishing of form III-A is enough proof so as to relieve the selling dealer of his liability and if it is found that the purchasing dealer was not authorised to issue the declaration in form III-A and had furnished a false certificate the remedy of the department is in proceeding against the purchasing dealer and not against the selling dealer who acted bona fide. 14.. In the present case the dealer had made sales to some other parties as well and on enquiries nothing adverse had been found. So far as M/s. Loha Krishi Udyog is concerned the only information gathered by the assessing officer was that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the purchaser and knowingly accepted fictitious forms. A dealer acting bona fide may be cheated by a purchasing dealer by issue of forms that were not genuine for one reason or the other but merely because some one had cheated the selling dealer, the later cannot be subjected to liability for sales tax without showing that he acted in a manner that lacks the care and caution of a reasonable man. Nothing of this sort has been shown in the conduct of the revisionist. Learned Standing Counsel laid stress on an averment made by the assessing officer in the assessment order for assessment year 1981-82 that Sri Arun Kumar the owner of the business in the name of the revisionist had stated that he had been doing business with this party for the past several years and the forms were genuine and that he accepted the responsibility for any defect in the disputed form III-Kha. After the initiation of action under section 21 no statement of Arun Kumar seems to have been recorded to extract from him any information which may indicate that while entering into the transactions of sale in question and accepting forms III-B, he knew that the said firm do not exist and the forms are forged and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprises, Unnao, whether this form was issued by it or not and in case, if it denies then the proper opportunity of cross examination should be given to the applicant. The claim against the form cannot be denied merely on the information that the said form was not issued from the office of M/s. Kishore Enterprises, Unnao. It is not the case that the form was non-genuine or it was not printed by the department. If it is not the case of the department that the form was not printed by the department and is forged and there was collusion between M/s. Kishore Enterprises and the applicant, the benefit against the said form cannot be denied. Therefore, in respect of those forms, the matter requires reinvestigation. (ii) Form No. 29357 for Rs. 36,87,178 and form No. 29358 for Rs. 1,20,993 The claim for exemption has been disallowed against the aforesaid two forms on the ground that as per information these forms were not issued by M/s. Kishore Enterprises, Unnao, to the applicant but have been issued to the parties of Agra and Lucknow for Rs. 7,706.35 and Rs. 9,867.60. The perusal of the assessment order shows that in respect of these two forms also the proper enquiry was not made. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the said form was issued to the old firm in the assessment year 1983-84 and the said firm was reconstituted on April 1, 1984 and was registered under section 4-B of the Act. Claim of exemption against form No. 289123 was disallowed on the ground that the registration of M/s. Bhagwati Printing Press, Khatima was cancelled on January 23, 1985 while the firm subjected to the transactions after April 1, 1984. In this case, it is not disputed that M/s. Bhagwati Printing Press, Khatima was registered dealer and the aforesaid disputed form was issued to it and the form was genuine. It is not the case that the applicant was aware about the reconstitution of the registration on April 1, 1984, still, received the form. In the circumstances, it cannot be said that the applicant has not received form bona fidely and thus the benefit against the aforesaid form cannot be denied to the applicant. For the mistake committed by M/s. Bhagwati Printing Press, Khatima, the necessary action can be taken against it. M/s. Rattan Paper Convertors, Kanpur Form No. 115023 for Rs. 20,09,249 Claim of exemption against form No. 115023 was disallowed on the ground that the registration of M/s. Rattan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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