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TMI Blog1988 (7) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... ication related to the assessment year 1977-78 under the U.P. Sales Tax Act. The first question involved before the High Court of Allahabad was whether the purchase of pulses effected by the assessee prior to May 1, 1977, could be subjected to tax under section 3-D(2) of the Sales Tax Act. The Tribunal held that these could be so subjected. The High Court referred to the Notification No. S.T.-II-2712/X-6(8)- 77-U.P. Act XV-48-Order-77 and held that the contention of the 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 Assistant Commissioner (Judicial) had granted relief to the assessee in respect of his turnover on pulses of Rs. 3,75,500 to the extent of Rs. 3,19,679 on the basis of certain evidences that had been produced before the assessing authority and the Assistant Commissioner. The Tribunal was of the view that since the assessee had not furnished form III-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 Banney Khan v. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that if the assessee had not furnished the required declaration forms in order to be entitled for 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 Kedarnath Jute Mfg. Co. Ltd. v. Commercial Tax Officer [1965] 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. In 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 in 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal was also of the view that it is not open to the assessee to examine other evidences to rebut the presumption contained in section 3-D(7)(a) of the Act and in any case it is not open to the assessee to adduce such evidence at the stage of the second appeal. The argument of the learned counsel for the assessee-applicant is that tax exemption under section 3-D(7)(a) of the Act could have been allowed in respect of tax-paid purchases of foodgrains by examining other evidences in absence of production of necessary form III-C(2). The case of the assessee is that it could not be denied benefit of tax exemption only because the form has been lost or destroyed and it is open to him to satisfy the assessing authority by examining other evidences in respect of tax-paid purchase of the foodgrain. In nutshell the argument is that section 3-D(7), clauses (a) and (b) are directory in nature and not mandatory. In support of his argument learned counsel relied upon the decisions given in J.K. Manufacturers Ltd. v. Sales Tax Officer reported in [1970] 26 STC 310 (All.) [FB], Abdul Ghani Banney Khan v. Commissioner of Sales Tax reported in 1982 UPTC 665, Sharif-ud-Din v. Abdul Gani Lone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1), be deemed to be the first purchase, unless the dealer proves otherwise to the satisfaction of the assessing authority after having furnished such declaration or certificate, obtained from the selling dealer, in such form and manner and within such period, as may be prescribed. (b) Every sale within Uttar Pradesh by a dealer, either directly or through another, whether on his own account or on account of any one else, shall, for the purposes of sub-section (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." "Rule 12-B. Exemption from Purchase or sales tax under section 3-D.- (1) The certificates or declarations referred to in sub-section (7) of section 3-D shall be in forms III-C(1), III-C(2), III-C(3), III-C(4) and III-C(5) .........................." A perusal of section 3-D(7)(a) would show that it envisages three things. Firstly, it creates a legal fiction; secondly, it provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also not provided and, therefore, by the aforesaid amendment of section 3-D(7)(a) the legislature has now provided that the presumption can be rebutted in the manner prescribed in the Rules and not otherwise. The word "prescribed" has been defined in section 2(f) of the Act, means prescribed by the Rules made under this Act. In Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer [1965] 16 STC 607 (SC) it was held that where a dealer claims exemption in regard to sales to a registered dealer, the furnishing of declaration form under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act issued by the purchasing dealer is a condition for claiming exemption. We, therefore, are of the opinion that the legal presumption can be rebutted only in the manner provided under the Act read with the Rules and only after such declaration is furnished the assessee becomes entitled to tax exemption. The learned counsel for the assessee strongly relied on a Full Bench decision of this Court given in J.K. Manufacturers Ltd. v. Sales Tax Officer [1970] 26 STC 310. In this case the question that arose for consideration was as to whether rule 12-A of the rules is ultra vires. Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "For instance 'A' sells to 'B' and 'B' furnishes the necessary declaration forms but they are lost or destroyed in fire. Could the assessee be denied exemption only because the forms are lost or destroyed in fire. What is fundamental is sale to registered dealer. It appears the intention was that proof was not confined to only furnishing the declaration form but also proving the same to the satisfaction of the authority concerned." From this it appears that the circumstance of loss or destruction of the form weighed heavily in the mind of the learned single Judge in taking a contrary view. From this circumstance, learned single Judge inferred that the mode of proof was not confined only to furnishing of the declaration form but also envisaged proving the same to the satisfaction of the authority concerned by leading other evidences. So far this circumstance of loss or destruction of form is concerned, enough safeguard has been provided under sub-rule (23) of rule 12-B of the Rules. Sub-rule (23) of rule 12-B provides that: "When a duly completed certificate issued by a dealer to another is lost in transit or by the dealer to whom it was issued, the dealer issuing it shall, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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