1983 (8) TMI 240 - HC - VAT and Sales Tax

Issues Involved:
1. Entitlement of a registered dealer to obtain Form III-A for goods purchased for export.
2. Interpretation and application of Section 3-AA and 3-AAA of the U.P. Sales Tax Act.
3. Presumption regarding sales to consumers.
4. Requirement for issuing Form III-A under Rule 12-A.
5. Legality of the Sales Tax Officer's order dated 3rd February 1983.
6. Allegations of bias and violation of natural justice.

Issue-wise Detailed Analysis:

1. Entitlement of a Registered Dealer to Obtain Form III-A for Goods Purchased for Export:
The primary issue was whether a registered dealer purchasing goods for export is entitled to obtain Form III-A. The court examined Rule 12-A and Section 3-AAA of the U.P. Sales Tax Act. It was determined that Form III-A is intended for dealers who purchase goods for resale within the state or in inter-state trade or commerce, not for export. The court concluded that purchases made for export do not satisfy the requirements of Section 3-AAA, and thus, the dealer is not entitled to Form III-A for such transactions.

2. Interpretation and Application of Section 3-AA and 3-AAA of the U.P. Sales Tax Act:
Section 3-AA fixes the point of taxability at the sale to the consumer, while Section 3-AAA presumes every sale to be to a consumer unless proven otherwise by the dealer. The court emphasized that these sections must be read together. The presumption that a sale is to a consumer is rebuttable if the dealer proves the goods were purchased for resale within the state or in inter-state trade or commerce, in the same form and condition.

3. Presumption Regarding Sales to Consumers:
The court discussed the presumption under Section 3-AAA that every sale is deemed to be to a consumer unless the dealer proves otherwise. This presumption is not conclusive and can be rebutted by providing a declaration in Form III-A, proving that the goods were purchased for resale within the state or in inter-state trade or commerce, in the same form and condition.

4. Requirement for Issuing Form III-A Under Rule 12-A:
Rule 12-A allows a registered dealer to obtain Form III-A for purchasing goods without paying tax, provided the goods are for resale within the state or in inter-state trade or commerce. The court clarified that the purpose of Form III-A is to enable the dealer to furnish a declaration that the goods are for resale, thereby rebutting the presumption of sale to a consumer.

5. Legality of the Sales Tax Officer's Order Dated 3rd February 1983:
The Sales Tax Officer's order rejecting the petitioner's application for Form III-A was challenged. The court held that the rejection was based on the correct interpretation of the law, as the purchases were made for export and did not meet the criteria for obtaining Form III-A. However, the court also noted that the petitioner is entitled to Form III-A for transactions involving resale within the state or in inter-state trade or commerce.

6. Allegations of Bias and Violation of Natural Justice:
The petitioner alleged bias and violation of natural justice in the order dated 3rd February 1983. The court found no substance in the bias claim but acknowledged that the petitioner was not heard before the order was passed, which violated natural justice principles. The court emphasized the need for fair play and an opportunity for the petitioner to present its case.

Separate Judgments Delivered by Judges:
- One judge opined that the petitioner could not ask for Form III-A for goods purchased for export, supporting the Sales Tax Officer's decision.
- Another judge disagreed, stating that the petitioner should be entitled to Form III-A for goods purchased for export, as the legislative intent was to tax goods at one stage or another, not necessarily at the point of sale to the consumer.

Final Order:
In view of the difference of opinion, the case was referred to another judge, who concluded that the petitioner is entitled to Form III-A for goods purchased for export. The writ petition was allowed, quashing the Sales Tax Officer's order dated 3rd February 1983, and directing the issuance of Form III-A in accordance with the law. The petitioner was also awarded costs.

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