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2015 (1) TMI 340 - HC - VAT and Sales TaxDisallowance of claim of deduction u/s 4(2)(a)(v) - Whether the dealer exercise the ordinary business prudence and the transactions can be said to be in a normal course of business without recording a finding as to positive connivance or collusion of the dealer – Held that:- The name of the MMTC was written on the form - if in the utilization account, the dealer has shown his form as given to MMTC, it was clearly a mistake of the dealer and not of the petitioner - It was for the dealer to clarify that he could not correct the error crept in the utilization account - There was no fault on the part of the petitioner in accepting the form from the purchasing dealer - The Tribunal, has, in a very perfunctory manner, disallowed the claim of the petitioner overlooking the above – thus, the matter is remitted back to the Tribunal for fresh adjudication – Decided in favour of petitioner. Judgment delivered in Commissioner of Sales Tax, New Delhi Versus Hari Ram Oil Co. [1992 (2) TMI 326 - DELHI HIGH COURT] rightly distinguished or not – Purchasing dealer had returned his registration certificate prior to the date of transaction with the selling dealer - Held that:- The Tribunal was rightly of the view that the petitioner was complacent with the transaction without caring to see whether purchasing dealer was registered or not and whether the purchasing dealer was authorized to purchase goods against the statutory form - it was the case of the petitioner, that it had seen the registration certificate of the purchasing dealer in the year 1994 - the registration certificate of the dealer was cancelled on 02.04.1990 - even though, no gazette notification was issued, the ground of having seen the certificate and no gazette notification was issued are contradictory inasmuch as if the registration certificate was seen, then the same was not cancelled and no question of gazette notification having been issued arises – thus, the judgment of Hari Ram Oil’s case would not be applicable. The similar issue has been decided in Prince Plastics & Chemical Industries and others Versus Commissioner of Sales Tax and others (and other writ petitions) [2002 (7) TMI 770 - DELHI HIGH COURT] wherein it has been held that even if purchasing dealers have applied for ST-1 Forms but have not received them for any reason, the selling dealer is not automatically exonerated from liability, nay the statutory duty to collect tax, since the ST-1 Form is not forthcoming - Traders are apparently quite willing to run the risk of one amongst many transactions going sour, so far as supply of these forms is concerned - it is not uncommon for a purchasing dealer to renege on its assurance to supply ST-1 Forms to the selling dealer - The State does not thereupon forfeit its entitlement for sales tax - it is wholly illogical to place the State in such a position where it cannot recover its sales tax dues at all - the dealer who has chosen to trust the other dealer must suffer and can take action against the party - this is the risk an assessee runs and if for any reason, including a subsequent decision of the Sales Tax Department to withhold the supply of ST-1 Forms to a purchasing dealer they are put in an uncomfortable position of having to pay the tax and initiate appropriate legal action for recovering it from the Purchasing Dealer, so be it - The State is entitled to its tax, where the requisite ST-1 Form is unavailable for any reason - petitioner is not entitled to the deduction – Decided against petitioner.
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