TMI Blog2006 (10) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with a view to support or makes any claim that the transaction is not liable to be taxed or liable to be taxed at a lower rate. We fail to appreciate as to how Section 10(3) of the Act would be applicable to the facts of the present case. In fact, the assessing officer has referred to Section 12(3)(b) of the Act while imposing penalty and there is no reference to Section 10(3) of the Act. In the circumstances, it is impossible to agree with the view of the learned single Judge that the law laid down by this Court in State of Tamil Nadu v. Madras Petro Chem Ltd.[ 1991 (7) TMI 343 - MADRAS HIGH COURT] is no longer good law. It is essentially a rule of policy, convenience and discretion and never a rule of law. In Harbanslal Sahnia v. Indian Oil Corporation Ltd., [ 2002 (12) TMI 564 - SUPREME COURT] , held that the rule of exclusion of writ jurisdiction by availability of alternative remedy is a rule of discretion and not one of compulsion and the court must consider the pros and cons of the case and then may interfere if it comes to the conclusion that the petitioner seeks enforcement of any of the fundamental rights; where there is failure of principles of natural justice or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover only against the purchasing dealer and not against the appellant, who is the selling dealer, as per Section 3(3) of the Act. 3. Before the learned single Judge, in support of his submission, the appellant placed reliance on the decision of a Division Bench of this Court in State of Tamil Nadu v. Madras Petro Chem Ltd. 89 STC 438, an unreported order of a Division Bench of this Court dated 4.12.2001 rendered in Writ Petition No. 10610 of 2000 (State of Tamil Nadu v. Seema Udyog) and also an order made by a learned single Judge of this Court in Writ Petition No. 7753 of 2006 dated 21.3.2006 (Screenwell India v. DTCO). The learned single Judge, however, held that the decisions relied upon by the appellant are no longer good law as Section 3(3) of the Act has been considerably amended and further more, Section 10, which provides for burden of proof on the dealer, who claims that he is not liable to pay tax, has not been taken up for consideration. The other important factor, according to the learned single Judge is that Sub-clause (3) has been introduced to Section 10 by Amendment Act 60/1997 with effect from 6.11.1997 which provides that, where any dealer knowingly produces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section shall not apply to: (a) any sale of (high speed diesel oil, light diesel oil and molasses; and (b) any sale, unless the dealer selling such goods furnishes to the assessing authority in the prescribed manner and within the prescribed period, a declaration duly filled in and signed by the dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. Provided further that any dealer who after purchasing the goods in respect of which he had furnished any declaration, fails to make use of the goods so purchased for the purpose specified in the declaration but disposes of such goods in any other manner, shall pay the difference of tax payable on the turnover relating to such goods at the rate prescribed and three percent: Provided also that the dealer purchasing the goods maintains a separate stock account for each of the goods purchased by him showing such particulars as may be prescribed. On a plain reading of this Section, it is seen that concessional rate is subject to the production of Form XVII by the selling dealer obtained by him from the manufacturing dealer as prescribed in Rule 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods to another for use by the latter as component parts in the manufacture of other goods for sale in the State is entitled to be taxed at a concessional rate on the strength of declarations in Form XVII given by the purchasing dealer), shows that the Legislature had taken care of any wrong declaration by the purchasing dealer by making the purchasing dealer liable for the difference of tax payable on the turnover relating to the sale of such goods at the rate prescribed in the First Schedule and 4 per cent. In other words, the selling dealer is not made liable for the wrong declaration by the purchasing dealer. Once the selling dealer produces the declaration in the prescribed form, there is no further obligation on the part of the selling dealer and he will automatically be entitled to the concessional rate. If the declaration turn out to be false, in the sense that the goods purchased have not been used as declared in the prescribed form, the purchaser is exposed to the penalties provided by Section 23 and Section 45(2)(e) of the Act. 7. This issue was again considered in State of Tamil Nadu v. Seema Udyog (cited supra) in the context of the amended provisions of Section 3(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s judgment at pages 120 and 121 held as follows: This Court observed that indisputably the seller could have in these transactions no control over the purchaser. He had to rely upon the representation made to him. He must satisfy himself that the purchaser was a registered dealer, and the goods purchased were specified in his certificate but his duty extended no further. If he was satisfied on these two matters on a representation made to him in the manner prescribed by the rules and the representation was recorded in the certificate in form C, the selling dealer was under no further obligation to see to the application of the goods for the purpose for which it was represented that the goods were intended to be used. If the purchasing dealer misapplied the goods he incurred a penalty under Section 10 of the Act. That penalty was incurred by the purchasing dealer and could not be visited upon the selling dealer. The selling dealer was under the Act authorized to collect from the purchasing dealer the amount payable by him as tax on the transaction, and he could collect that amount only in the light of the declaration mentioned in the certificate in form C. There was nothing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot the case of the Revenue that the seller has produced a false bill, vouchers, declaration, certificate or other document with a view to support or makes any claim that the transaction is not liable to be taxed or liable to be taxed at a lower rate. We fail to appreciate as to how Section 10(3) of the Act would be applicable to the facts of the present case. In fact, the assessing officer has referred to Section 12(3)(b) of the Act while imposing penalty and there is no reference to Section 10(3) of the Act. In the circumstances, it is impossible to agree with the view of the learned single Judge that the law laid down by this Court in State of Tamil Nadu v. Madras Petro Chem Ltd., (cited supra) and State of Tamil Nadu v. Seema Udyog (cited supra) is no longer good law. 12. Lastly, we shall deal with the plea regarding alternative remedy as raised by the Revenue. Except for a period when Article 226 was amended by the Constitution (42nd Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. In Harbanslal Sahnia v. Indian Oi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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