1969 (7) TMI 106 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Taxability of turnover of oil-seeds under Section 3-AA read with Rule 12-A of the U.P. Sales Tax Act.
2. Evidentiary value of Form III-A certificates.
3. Burden of proof regarding the sale being for resale or consumption.
4. Interpretation of Rule 12-A in light of Section 3-AA(2).
5. Role of the Sales Tax Officer in assessing the genuineness and correctness of Form III-A certificates.

Detailed Analysis:

1. Taxability of Turnover of Oil-Seeds:
The primary issue was whether the turnover of oil-seeds was taxable under Section 3-AA, read with Rule 12-A, of the U.P. Sales Tax Act. The dealer-assessee sold oil-seeds to mills and received Form III-A certificates stating that the purchases were for resale in the same condition. The Sales Tax Officer initially assessed the dealer-assessee on the turnover, presuming the sale was for consumption. However, the appellate authority excluded this turnover from the assessable turnover, and the Judge (Revisions) upheld this decision, leading to the references.

2. Evidentiary Value of Form III-A Certificates:
The Judge (Revisions) held that the passing of Form III-A was sufficient to warrant that the purchases were for resale. However, the court clarified that while Form III-A provides prima facie evidence that the goods were for resale, it is not conclusive. The Sales Tax Officer can consider other materials to determine the genuineness and correctness of the certificate.

3. Burden of Proof:
Section 3-AA(2) of the Act categorically presumes every sale by a dealer to be to a consumer unless proven otherwise by the dealer. Rule 12-A cannot override this presumption. The dealer must furnish Form III-A to rebut the presumption that the sale was to a consumer. However, the court emphasized that the burden of proving the sale was not for consumption remains on the dealer, and Form III-A only provides prima facie evidence, not conclusive proof.

4. Interpretation of Rule 12-A:
The court held that Rule 12-A should be read in harmony with Section 3-AA(2). Rule 12-A provides a method of proof but does not make Form III-A conclusive evidence. The rule is subject to the statutory presumption in Section 3-AA(2) and does not eliminate the Sales Tax Officer's power to require further proof.

5. Role of the Sales Tax Officer:
The Sales Tax Officer can scrutinize the genuineness and correctness of Form III-A. If there is doubt about the document's authenticity or the accuracy of its contents, the Sales Tax Officer can consider additional evidence. The court noted that the appellate authority had directed further inquiry into the genuineness of the certificates, indicating that the Sales Tax Officer must ensure the certificates are genuine and correct.

Conclusion:
The court answered the question in the negative, in favor of the dealer-assessee, and against the Commissioner, Sales Tax. The court clarified that while Form III-A provides prima facie evidence that the sale was for resale, it is not conclusive, and the Sales Tax Officer can consider other materials to verify the certificate's authenticity and correctness. The burden of proof remains on the dealer to show that the sale was not to a consumer, and the Sales Tax Officer has the authority to require further proof if necessary.