1974 (11) TMI 83 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the first proviso to section 9 of the Bombay Sales Tax Act, 1953 regarding exemption claim.
2. Validity of certificates in form K for exemption claim under section 9(1).
3. Compliance with statutory requirements for exemption claim under the Sales Tax Act.

Analysis:
The judgment by the High Court of Bombay addressed a reference under section 34(1) of the Bombay Sales Tax Act, 1953, concerning the entitlement of an assessee to claim exemption under the first proviso to section 9. The primary issue revolved around the interpretation of the relevant provisions of law to determine the validity of the exemption claim. The court highlighted the significance of the prescribed form, form K, under the Act, which necessitates a dealer to furnish a certificate declaring the goods purchased are intended for resale. The court emphasized the statutory requirements for claiming exemption under section 9(1) and the importance of strict compliance with the prescribed procedures.

Regarding the specific case in question, the assessee had claimed deduction for sales made to a particular company, asserting they were covered by the first proviso to section 9. However, the assessing authority disallowed the claim due to discrepancies in the certificates provided by the purchasing company. The court examined precedents, including judgments by the Supreme Court, to elucidate the necessity of adhering to the prescribed forms and procedures for claiming exemptions under the Sales Tax Acts. It was emphasized that the signature on the certificate, either by the purchasing dealer or an authorized person as per the rules, is crucial for the validity of the claim.

The court distinguished a previous case where a consolidated declaration form was accepted despite being in an exercise book, as it contained all required information. In contrast, in the present case, the fundamental requirement of valid signatures on the certificates was not met, rendering the claim ineligible for exemption under section 9. The judgment underscored the importance of strict adherence to statutory provisions and the prescribed forms for claiming exemptions under the Sales Tax Act. Ultimately, the court ruled that the applicant was not entitled to claim exemption under the first proviso to section 9 for the specified turnover, upholding the decision of the assessing authority. The applicant was directed to bear the costs of the reference, and the reference was answered accordingly.