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Commissioner of Sales Tax Vs. Mawana Sahkari Kriya Vikriya Samiti - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberS.T.R. No. 708 of 1980
Judge
Reported in[1982]49STC176(All)
AppellantCommissioner of Sales Tax
RespondentMawana Sahkari Kriya Vikriya Samiti
Appellant AdvocateStanding Counsel
Respondent AdvocateP.C. Verma, Adv.
Excerpt:
- - 7. before me as well as almost similar question came up in commissioner of sales tax v......had claimed benefit of lower rate of tax under section 8(1) of the central act and filed number of forms in respect of transactions of sale. one such form related to three bills of the following amounts : rs. 1,694.00, rs. 3,210.00, and rs. 752.50.5. the sales tax officer did not accept the assessee's contention because that form was in respect of more than one transaction and of the value of more than rs. 5,000. on appeal, the assistant commissioner (judicial) took the view that inasmuch as two of the transactions were of the amount of less than rs. 5,000 relief in respect thereof could be given. the same view was taken by the revising authority and then at the instance of the department a reference was made to this court. the proviso to rule 8(1-c), as is stood at the time under.....
Judgment:

R.R. Rastogi, J.

1. This is Commissioner's revision under Section 11(1) of the U.P. Sales Tax Act (hereinafter 'the Act') and the question involved is as to whether a single certificate in form III-C(1) covering more than one transaction is valid in law. The brief facts in this behalf are that the respondent-assessee, a co-operative society, carries on business in foodgrains, gur, maida, fertiliser, etc. In its assessment to sales tax under the Act, in respect of the purchases of gur amounting to Rs. 1,35,345.00 the assessee claimed that it was not liable to tax under Section 3-D(2) because those purchases had already suffered tax and it was not the first purchaser thereof and in support of that contention filed one single certificate in form III-C(1). The assessing authority did not accept the assessee's contention because it was of the opinion that one single certificate covering more than one transaction was not legal and valid and accordingly the entire amount of Rs. 1,35,345.00 was brought to tax under Section 3-D(2) of the Act. That view was confirmed by the appellate authority, but on further revision, the Additional Judge (Revisions) has taken the view that in the absence of any finding that tax had not been deposited in respect of these transactions by the selling dealers, it could not be held that the assessee was the first purchaser of these goods and was liable to tax in respect thereof.

2. It has been submitted before me by the learned standing counsel that the view taken by the Additional Judge (Revisions) is erroneous in law. After hearing the counsel for the parties I find that there is considerable substance in this contention. Rule 12-B of the Rules framed under the Act which has been inserted with effect from 4th of March, 1974, by the U. P. Sales Tax (First Amendment) Rules, 1974, provides for exemption from purchase or sales tax under Section 3-D. Clause (a) of Sub-rule (7) says that in respect of the goods notified under Clause (b) of Sub-section (1) of Section 3-D a certificate in form III-C(1) shall be issued by the dealer, who makes the first purchase of the goods, to the dealer selling such goods. Thus, in the present case, the assessee being the dealer who sold the disputed goods, in order to support its claim, should have obtained form III-C(1) from the dealer who had made first purchase of the same. Sub-rule (9) says.:

No single certificate shall cover more than one bill or cash memo or account of sale or purchase furnished by the selling or purchasing agent to his principal, as the case may be.

3. It would be seen, therefore, that under this Sub-rule there should be one certificate in respect of one transaction. One certificate cannot cover more than one transaction. In the present case the certificate furnished by the assessee in form III-C(1) covered more than one transaction. Of course, the assessee should have been given choice to indicate the transaction which he wanted to be covered by the certificate filed by it. The certificate filed by it could not have been rejected in toto.

4. In Commissioner of Sales Tax v. Kanpur Engineering Stores 1976 UPTC 326 an almost similar question but with reference to the application of the proviso to Rule 8(1-C) of the Central Sales Tax Uttar Pradesh Rules, 1957, had come up for consideration. In that case the assessee had claimed benefit of lower rate of tax under Section 8(1) of the Central Act and filed number of forms in respect of transactions of sale. One such form related to three bills of the following amounts : Rs. 1,694.00, Rs. 3,210.00, and Rs. 752.50.

5. The Sales Tax Officer did not accept the assessee's contention because that form was in respect of more than one transaction and of the value of more than Rs. 5,000. On appeal, the Assistant Commissioner (Judicial) took the view that inasmuch as two of the transactions were of the amount of less than Rs. 5,000 relief in respect thereof could be given. The same view was taken by the revising authority and then at the instance of the department a reference was made to this Court. The proviso to Rule 8(1-C), as is stood at the time under consideration, read:

Provided that no single declaration shall cover more than one transaction of sale, except in cases where the total amount covered by one declaration is equal to or less than Rs. 5,000 or such other amount as the Commissioner may, by a general order, notify in the official Gazette.

6. The view taken by this Court was that since the declaration in form C covered three transactions totalling more than Rs. 5,000, the assessee could not claim benefit of declaration for all the three of them but it did not follow that no benefit at all could be had by the assessee in respect of the two transactions shown in the declaration the value of which was less than Rs. 5,000. Hence the view taken by the revising authority was confirmed.

7. Before me as well as almost similar question came up in Commissioner of Sales Tax v. Lakshmi Ratan Engineering Works Ltd. 1980 UPTC 1346.

8. In my opinion, therefore, on the basis of a single certificate in form III-C(1) filed by the assessee in respect of the aggregate amount of Rs. 1,35,345.00 exemption could not have been allowed and the view taken by the revising authority is erroneous in law. At the same time the assessee's claim could not be negatived in entirety. The assessee should be given an opportunity to indicate its choice to the transaction which it likes to be covered by this declaration and in respect of the same it will be entitled to exemption from tax under Section 3-D(2) of the Act. For this purpose the case has to go back to the Sales Tax Tribunal. The revision is hence allowed and the order of the revising authority is set aside to the extent noted above and the case is remanded to the Sales Tax Tribunal for decision of the question noted above in the light of the observations made above by me.

9. There will be no order as to costs.


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