TMI Blog2000 (7) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case are that the assessment for the period 1979-80 was completed under section 12(4) of the Orissa Sales Tax Act, 1947 (for short, the Act ) by allowing deduction of a sum of Rs. 4,39,599.82 sold to M/s. Orissa Textiles and Steel Ltd., against furnishing declaration form in form I. But subsequently, the assessment was reopened under section 12(8) of the Act on the ground that the purchasing dealer who was a manufacturer of hardware, iron and steel goods could not have used furnace oil purchased from the opposite party on the strength of form I as it did not go into composition of the finished products. Accordingly, said deduction allowed on account of sale against form I to M/s. Orissa Textiles and Steel Ltd., was disallowed. Aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no separate heading in the registration certificate with regard to raw material. Raw material and other goods required for manufacturing are mentioned in the aforesaid column. It is also not disputed by any of the forums that the purchasing dealer is entitled to furnish declaration form in form I for purchasing goods free of tax and this form I is to the following effect: I/We......hereby declare that the goods purchased by me/we in bill/cash memo No........dated..........from.......shall be used as raw materials for the purpose of manufacture inside the State, i.e., as goods which will directly go into the composition of the finished product to be manufactured by me/us. I/We further declare that the manufacturing unit have star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that once there is an endorsement in the certificate of registration that a class or classes of goods specified therein are intended to be used by him in the manufacture or processing of goods for sale and furnishes a declaration in the prescribed form, the selling dealer need not pay tax on such turnover. Here, the purchasing dealer satisfies both the conditions. Therefore, it has to be seen whether the selling dealer has any further responsibility to satisfy the assessing officer for claiming deduction of such material sold to a purchasing dealer against appropriate declaration forms. 5. Law is well-settled since long in State of Madras v. Radio and Electricals Ltd. [1966] 18 STC 222 (SC). While dealing with a declaration under the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esented that the goods were intended to be used. If the purchasing dealer misapplies the goods he incurs a penalty under section 10. That penalty is incurred by the purchasing dealer and cannot be visited upon the selling dealer. The selling dealer is under the Act authorised to collect from the purchasing dealer the amount payable by him as tax on the transaction, and he can collect that amount only in the light of the declaration mentioned in the certificate in form 'C'. He cannot hold an enquiry whether the notified authority who issued the certificate of registration acted properly, or ascertain whether the purchaser, notwithstanding the declaration, was likely to use the goods for a purpose other than the purpose mentioned in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in violation of declaration in the hands of the purchasing dealer. Original assessment order passed under section 12(4) of the Act allowing deduction of a sum of Rs. 4,39,399.02 sold by opposite party to M/s. Orissa Textiles and Steel Ltd., the purchasing dealer was in accordance with law. Therefore, the Assistant Commissioner is right in annulling the assessment order passed under section 12(8) of the Act and the Tribunal is correct in dismissing the appeal filed by the State against such order of the Assistant Commissioner. 6. In view of the aforesaid discussion, we answer the question against the Revenue in the following manner: On the facts and in the circumstances of the case, the Sales Tax Tribunal is justified to hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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