Chittatosh Mookerjee, J.
1. Respondent No. 1 at the material time was a registered dealer under theBengal Finance (Sales Tax) Act, 1941. It had been carrying on a business iniron and steel. On 30th September 1971, the Commercial Tax Officer, JorasankoCharge, passed an assessment order under Section 11(1) of the aforesaid Act inrespect of the returns submitted by respondent No. 1 for the four quartersending the last day of December, 1967. The Commercial Tax Officer, by the saidorder, in computing the net taxable turnover of respondent No. I, haddisallowed deduction from its gross turnover for the aforesaid four quartersthe purported sales amounting to Rs. 31,64,682 to certain registered dealers,although respondent No. 1 had produced the declaration forms allegedly grantedby the said buyers. Respondent No. 1, being aggrieved by the said decision,had preferred an appeal under Section 20(1) of the Bengal Finance (Sales Tax)Act, 1941. The Assistant Commissioner, Commercial Taxes, North Circle, by hisorder dated 28th October, 1972, dismissed the said appeal and confirmed theassessment of the Commercial Tax Officer in respect of the four quartersending 31st December, 1967.
2. The Commercial Tax Officer by anotherassessment order dated 29th January, 1973, in respect of the four quartersending 31st December, 1968, again disallowed certain deductions of sales toother registered dealers on the ground of certain alleged defects in thedeclaration forms relating to the said sales.
3. Thereafter, theCommercial Tax Officer had issued a notice under Section 11 read with Section14(1) of the Bengal Finance (Sales Tax) Act, 1941, upon respondent No. 1 inrespect of the returns submitted by him for four quarters ending 31stDecember, 1969.
4. Respondent No. 1 filed a writ petition, being CivilRule No. 394(W) of 1973, Jasodalal Ghosal Pvt. Ltd. v. Commercial Tax Officer 35 S.T.C. 383 inter alia, challenging the aforesaid two assessmentorders of the Commercial Tax Officer, Jorasanko Charge, in respect of the fourquarters ending 31st December, 1967, and the four quarters ending 31stDecember, 1968, the appellate order of the Assistant Commissioner in respectof the assessment for the four quarters ending 31st December, 1967, and alsothe notice under Section 11 read with Section 14 of the Act in respect of thefour quarters ending 31st December, 1969. On 14th May, 1974, his Lordship theHonourable Mr. Justice Amiya Kumar Mookerjee made the said civil rule absolutein respect of the aforesaid assessments of sales tax for the four quartersending 31st December, 1967, and those ending 31st December, 1968. The learnedJudge, however, held that, as no order had been passed in respect of the fourquarters ending 31st December, 1969, at that stage, no relief could be grantedto the registered dealers concerned. The State of West Bengal and others,being aggrieved by the said judgment of his Lordship Mr. Justice Amiya KumarMookerjee, have preferred this appeal under Clause 15 of the LettersPatent.
5. Mr. J.C. Pal, the learned Advocate for the appellants, hassubmitted that the learned single Judge was not correct in holding that theCommercial Tax Officer had erroneously and illegally rejected a large numberof declaration forms produced by the registered dealer in order to claimdeduction under Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act. Mr.Pal submitted that in order to claim deduction of sales to registered dealersunder Section 5(2)(a)(ii) of the said Act read with Rule 27A of the BengalSales Tax Rules, 1941, the registered dealer must satisfy the Commercial TaxOfficer that the declaration forms produced by him have been duly filled upand contained all the necessary and requisite particulars. In other words, theassessee must strictly prove the conditions for obtaining tax relief under theaforesaid provisions.
6. The expression 'taxable turnover' underSection 5(2) of the Bengal Finance (Sales Tax) Act means in the case of adealer who is liable to pay tax under Section 4 of the said Act that part ofhis gross turnover during any period which remains after deducting therefromthe transactions specified in different sub-clauses of Clause (a) and theaggregate of the amounts in Clause (b) of Sub-section (2) of Section 5. In theinstant case, we are concerned with the question whether or not the revenueauthorities had committed any jurisdictional error in refusing deduction inrespect of the two periods of assessment concerning the alleged sales made bythe respondent although the registered dealer concerned had produceddeclaration forms in support of the said transactions. Rule 27A(1), interalia, prescribes that a dealer who wishes to deduct from his gross turnoverthe amount in respect of a sale on the ground that he is entitled to make suchdeduction under the provisions of Sub-clauses (ii), (iii) and (iv) of Clause(a) of Section 5(2) shall on demand produce in respect of such sale the copyof the relevant cash memo or bill and a declaration in form XXIV duly filledin and signed by the purchasing dealer. Under the proviso to Rule 27A(1), adeclaration in a form in contravention of the provisions of Clause (a) orClause (b) of the said proviso shall not entitle the dealer who accepts suchdeclaration to make any deduction under this sub-rule on the strength thereof.Form XXIV, which is the prescribed form of declaration, inter alia, requiresthe particulars of (a) purchase order No. and date, (b) bill/cash memo No.,date and amount, (c) dealer's challan No. and date to be furnished. In theform of the declaration, the challan number is also required to be stated.
7. We may refer to some of the decisions of this Court which haveconsidered whether the aforesaid provisions relating to declaration formsunder Section 5(2)(a)(ii) read with Rule 27A are mandatory or directory. P.N.Mookerjee and Amaresh Roy, JJ., in Durga Sree Stores v. Board of Revenue, WestBengal A.I.R. 1963 Cal. 409 inter alia, held that the revenue authorities hadcommitted errors apparent on the face of the record in rejecting thedeclaration forms in question merely on the ground that the four alternativesmentioned in the printed forms had not been struck out. The learned Judgesfurther held that there was nothing to show that the certificates of thedealers to whom the goods in question were sold did not include those multiplepurposes and further 'the mere non-striking out of the alternatives would not,in any sense, be a fatal defect'. Such error was a jurisdictional error andthis Court was entitled to interfere under Article 227 of the Constitution.Thus, the Division Bench in Durga Sree Stores v. Board of Revenue, WestBengal A.I.R. 1963 Cal. 409, had proceeded on the basis that every omission ordefect in a declaration form would not disentitle a registered dealer fromclaiming deduction under Section 5(2)(a)(ii). In other words, their Lordshipswere of the view that a substantial compliance with the provisions relating todeclaration forms would be sufficient.
8. Banerjee and K.L. Roy, JJ.,in Shri Anil Kumar Dutta v. Additional Member, Board of Revenue, West Bengal 20 S.T.C. 528 at 538, in disposing of a reference under Section 21(3)of the Bengal Finance (Sales Tax) Act, more elaborately discussed the saidquestion. In the said case, deductions under Section 5(2)(a)(ii) of the Actclaimed by a registered dealer had been disallowed on the ground that some ofthe purchasing dealers became later untraceable. Secondly, the saiddeclaration forms were not duly filled up. The learned Judge at page 531 ofthe Reports has set out the questions of law raised under Section 21(3) of theAct. The learned Judges in Shri Anil Kumar Dutta v. Additional Member, Boardof Revenue, West Bengal  20 S.T.C. 528 at 538, had, inter alia,considered the question whether or not the provisions relating to particularsin a declaration form were mandatory. Their Lordships at page 538 of theReports pointed out that the duty was cast upon the purchasing dealer to fillup the prescribed form in the prescribed manner and therein to include theprescribed particulars. If the purchasing dealer fails or neglects to fill upthe prescribed form in the prescribed manner or fails or neglects to includethe prescribed particulars therein, the selling dealer may not compel him tocorrect the errors or omissions. According to their Lordships, the objectbehind the provisions contained in the proviso to Section 5(2)(a)(ii) is toidentify the particular registered dealer to whom sales have been made. Ifsales to registered dealers are not required to be covered by the declarationforms, according to their Lordships, it might have been possible for dishonestselling dealers to claim enormous deductions even if no sales had in fact beenmade. Their Lordships in the case of Shri Anil Kumar Dutta v. AdditionalMember, Board of Revenue, West Bengal  20 S.T.C. 528 at 538, held thatthe learned Advocate for the revenue was not wholly right in his contentionthat the requirements of Section 5(2)(a)(ii), proviso, and of Rule 27A readwith form XXIV should be treated as obligatory or mandatory and thatnon-compliance therewith would invalidate a declaration form. Their Lordshipsfurther held that since the selling registered dealer has to depend upon theability and willingness of the purchasing dealer to fill up the form, even asubstantial compliance of the legal provisions would be sufficient. Banerjeeand K.L. Roy, JJ., in Shri Anil Kumar Dutta v. Additional Member, Board ofRevenue, West Bengal  20 S.T.C. 528 at 538 observed that the implicationof the judgment in Durga Sree Stores v. Board of Revenue, West Bengal A.I.R.1963 Cal. 409 was that the provisions of Section 5(2)(a)(ii), proviso, readwith Rule 27A and the prescribed form, should be treated as directory andwhich need be substantially complied with. Mr. Pal, the learned Advocate forthe appellants, tried to submit before us that the case of Shri Anil KumarDutta v. Additional Member, Board of Revenue, West Bengal, was not correctlydecided. Sitting in co-ordinate jurisdiction, we are not in a position tooverrule the said decision and to come to a contrary conclusion that Section5(2)(a)(ii), Rule 27A and the prescribed form are mandatory and any infractionof the same would mean automatic rejection of the defective declaration forms.We are bound by the Division Bench decision in Durga Sree Stores v. Board ofRevenue, West Bengal1, that the requirements of these provisions should betreated as directory and, therefore, a substantial compliance of the samewould be sufficient in law. Mr. Pal, the learned Advocate for the appellants,in this connection had relied upon the decision of the Supreme Court in Stateof Madras v. Radio and Electricals Ltd. A.I.R. 1967 S.C. 234 at 239, para10 In our view, the said decision cannot assist the present appellants. InState of Madras v. Radio and Electricals Ltd.2 in certain certificate in formC of the Central Sales Tax (Registration and Turnover) Rules, 1957, all thealternatives of the printed form were retained and in others one or more butnot all the alternatives were retained. The learned Advocate for the State ofMadras had urged before the Supreme Court that a certificate in form C isdefective, unless it specified only one purpose for which goods purchased areintended to be used. The Supreme Court repelled the said contention becauseit was not borne out by the Central Sales Tax Act, 1956, and the Central SalesTax (Registration and Turnover) Rules, 1957. According to the Supreme Court,when the purchasing dealer furnishes a certificate in form C without strikingany of the four alternatives, it is a representation that the goods purchasedare intended to be used for all or any of the purposes, and the certificatecomplies with the requirements of the Act and the Rules. The sales taxauthority is, of course, competent to scrutinise the certificate to find outwhether a certificate is genuine. He may also, in appropriate cases, when hehas reasonable grounds that the goods purchased are not covered by theregistration certificate of the purchasing dealer, make an enquiry about thecontents of the certificate of registration of the purchasing dealer. But itwas not for the tax officer to hold an enquiry as to whether the goodsspecified in the certificate of registration of the purchaser can be used forany of the purposes mentioned by him in form C or that the goods purchasedhave in fact been used for the purpose declared in the certificate [videparagraph 10, page 239 of the Reports; (pages 231-232 of 18 S.T.C.)]. Itappears that the observations of the Division Bench in Durga Sree Stores v.Board of Revenue, West Bengal A.I.R. 1963 Cal. 409 regarding the effect ofnon-striking out of the alternatives in the declaration forms under Section5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, are fully in accord withthe view of the Supreme Court in State of Madras v. Radio and ElectricalsLtd. A.I.R. 1967 S.C. 234 at 239, para 10 mentioned above.
9. Further,the Supreme Court in State of Madras v. Radio and Electricals Ltd. A.I.R. 1967S.C. 234 at 239, para 10 had considered the provisions of the Central SalesTax Act and of the Central Sales Tax (Registration and Turnover) Rulesrelating to granting of concessional rates for certain classes of sales andthe said provisions are not exactly in pari materia with the provisions of theBengal Finance (Sales Tax) Act and the Rules made thereunder relating todeclaration forms, which were considered by the aforesaid two previousDivision Benches of this Court and now being considered by us. Thirdly, theobservations of the Supreme Court in State of Madras v. Radio and ElectricalsLtd. A.I.R. 1967 S.C. 234 at 238-239, para 9 upon which Mr. Pal, the learnedAdvocate for the appellants, placed strong reliance were only generalobservations. The Supreme Court either expressly or impliedly did not lay downas an inflexible proposition of law that the requirements regarding the saidparticulars were mandatory and not directory.
10. Mr. Pal, the learnedAdvocate for the appellants, next submitted before us that the defects in thedeclaration forms considered by the Division Bench in Shri Anil Kumar Dutta v.Additional Member, Board of Revenue, West Bengal  20 S.T.C. 528 wereminor and inconsequential, whereas, in the instant case, the defects appearingin the declaration forms produced by respondent No. 1 to claim deduction underSection 5(2)(a)(ii) of the Act in respect of the two assessment periods ending31st December, 1967, and 31st December, 1968, were material and, therefore,the same invalidated the declaration forms.
11. We propose to considerthe findings of the Commercial Tax Officer in respect of the defects in thedeclaration forms in the aforesaid two assessment periods. The Commercial TaxOfficer in his assessment order for the four quarters ending 31st December,1967, gave the following reasons. In the first place, he referred to certainsales to registered dealers whose registration certificates were subsequentlycancelled. The Division Bench in Shri Anil Kumar Dutta v. Additional Member,Board of Revenue, West Bengal2, specifically laid down that the fact that thesales were made shortly before the surrender of the registration certificateby the purchasing dealer is a matter of little consequence. So long as apurchasing dealer remained a registered dealer, he is entitled to purchasewithout the payment of sales tax against declaration forms supplied by him.The cancellation of registration of such a purchasing dealer on a later datedoes not invalidate the declaration form given in respect of purchaseseffected prior to such cancellation. The Commercial Tax Officer in hisimpugned assessment order for the four quarters ending 31st December, 1968,had again rejected the declaration forms on the same ground that the dealerswho had furnished the said forms had subsequently ceased to be registereddealers. On the authority of the decision in Shri Anil Kumar Dutta v.Additional Member, Board of Revenue, West Bengal A.I.R. 1967 S.C. 234 at238-239, para 9, we are bound to hold that the Commercial Tax Officer hadcommitted an error apparent on the face of the records in holding that thedeclaration forms granted by the registered dealer is unacceptable because theselling dealers were not traceable. The same was also a conjecture and surmiseand not a relevant ground for refusing deduction under Section5(2)(a)(ii).
12. The other grounds given by the Commercial Tax Officerwere also erroneous on the face of the record. The Commercial Tax Officer didnot record any categorical finding as to whether the sales to other registereddealers in respect of which respondent No. 1 had claimed deduction underSection 5(2)(a)(ii) were not genuine but faked and fictitious. Therefore, theobservations of the Commercial Tax Officer that payments for some of thetransactions were made partly in cash and partly by chequ were not material.Mode of payments for goods allegedly supplied by the respondent to otherregistered dealers would be relevant only for deciding whether the saidtransactions were real or not. The third ground given by the Commercial TaxOfficer was that the declaration forms produced by the dealers were incompleteinasmuch as the alternatives had not been struck out. Again this point is nowconcluded by the decision of the Division Bench in Durga Sree Stores v. Boardof Revenue, West Bengal, A.I.R. 1963 Cal. 409 which was followed in Shri AnilKumar Dutta v. Additional Member, Board of Revenue, West Bengal  20S.T.C. 528.
13. Mr. Pal, the learned Advocate for the revenue, reliedupon the proviso to Rule 27A of the Bengal Sales Tax Rules and urged that aform in contravention of Clause (a) or (b) of the said proviso would notentitle a dealer to claim deduction under Section 5(2)(a)(ii). But theCommercial Tax Officer himself did not rely upon the said proviso to Rule 27Aand he did not state in the impugned assessment orders whether the declarationforms rejected by him related to one transaction or more. Therefore, we cannotallow the appellants to raise a new objection about the declaration forms inquestion at this stage. The Commercial Tax Officer in his impugned orders hadrelied upon the decision in Hindusthan Stationery Works (Pvt.) Ltd. v. Member,Board of Revenue  27 S.T.C. 394 at 397-398. The learned Judges in thesaid case had distinguished the earlier Division Bench decision in Durga SreeStores v. Board of Revenue, West Bengal1. In Hindusthan Stationary Works(Pvt.) Ltd.'s case  27 S.T.C. 394 at 397-398, the genuineness of thepurchases were not proved before the authority concerned. It was establishedthat the sales were in fact effected to registered dealers. In some cases,sales were effected after the registration of the purchasing dealers had beencan-celled (vide pages 397-398 of the Reports). Their Lordships did not alsopronounce that form XXIV declaration was mandatory. Thus, the decision inHindusthan Stationery Works (Pvt.) Ltd. v. Member, Board of Revenue  27S.T.C. 394 at 397-398, is in fact distinguishable from the present case, wherethe declaration forms were granted before the registration of the purchasingdealer was cancelled and there had been no categorical finding by the revenueauthorities that relative sales were not real.
13. The learned Advocatefor the appellants has also pointed out that the Commercial Tax Officer in thetwo assessment orders and also the Assistant Commissioner in his appellatedecision in respect of the assessment period ending 31st December, 1967, hadgiven another reason for disallowing deduction claimed by the respondent.According to these authorities, the registered dealers concerned had failed toproduce any order from the purchasing dealer to prove that such purchases wereactually made by them. In this connection, Mr. Pal also mentioned that suchsale order and the challan numbers were among the prescribed particulars ofform XXIV under Rule 27A of the Bengal Sales Tax Rules. On the other hand, Mr.Chakraborty with some force submitted that neither the Commercial Tax Officerin his two assessment orders nor the Assistant Commissioner in his appellateorder in respect of the assessment period ending 31st December, 1968, hadconsidered the cash memos, challans and other evidence produced by theregistered dealer to support the alleged transactions. Sitting in thisjurisdiction we cannot ourselves determine whether or not the transactionswere genuine. At the same time, the revenue authorities have not clearlyapplied their minds to the entire materials before them. They have notcategorically found whether or not the sales in respect of which thedeductions were claimed by respondent No. 1 were genuine or not. The impugnedassessment orders and the appellate order in question were quasi-judicial innature. Therefore, when we find that the revenue authorities have notconsidered in accordance with law the question whether the registered dealerwas entitled to claim deduction under Section 5(2)(a)(ii) of the BengalFinance (Sales Tax) Act, this Court is bound to quash the impugned orders andto command the authorities to again act and proceed in accordance withlaw.
14. The respondents in the writ petition did not urge in the trialcourt that the petitioner of the civil rule had alternative remedies againstthe impugned orders. Both parties made their respective submissions on meritsand the learned single Judge recorded his findings thereon. Therefore, at theappellate stage we cannot permit the said question to be raised for the firsttime. The Supreme Court in L. Hirday Narain v. Income-tax Officer, Bareilly 78 I.T.R. 26 at 31 (S.C.) had observed thatan order under Section 35 of the Income-tax Act might be revisable by theCommissioner of Income-tax but the petitioner of the said case had moved awrit petition which was entertained by the Allahabad High Court. If the HighCourt had not entertained his petition, the petitioner could have moved theCommissioner in revision. The Supreme Court in L. Hirday Narain v. Income-taxOfficer, Bareilly  78 I.T.R. 26 at 31 (S.C.), was unable to hold that because the revision applicationcould have been moved for an order correcting the order of the Income-taxOfficer, but was not moved, the High Court would be justified in dismissing asnot maintainable the petition which was entertained and was heard on themerits.
15. In the above view, we hold that the learned single Judgerightly quashed the impugned assessment orders in respect of the periodsending 31st December, 1967, and 31st December, 1968, including the appellateorder in respect of the four quarters ending 31st December, 1969. It is,however, necessary to clarify that the Commercial Tax Officer, JorasankoCharge, would be at liberty to make fresh assessments in respect of these twoperiods if not otherwise barred. In making the said assessments, theCommercial Tax Officer would be required to determine the taxable turnover forthe two periods in question and, inter alia, to consider the deductionsclaimed by the registered dealer in accordance with law.
16. Subject tothese observations, we dismiss this appeal without any order as to costs.
17. Let the security furnished at the time of issue of the civil rule bereturned to the respondent (petitioner in the rule) after three months fromdate.
Bankim Chandra Ray, J.