1985 (8) TMI 342 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether deductions under section 2(s) can be allowed without producing S.T. 17 forms physically on original or duplicate as envisaged under sub-rule (7) of rule 25C.
2. Whether secondary evidence can be considered if the original and duplicate S.T. 17 forms are lost.

Detailed Analysis:

Issue 1: Deductions under section 2(s) without S.T. 17 forms
The dealer-assessee sold cotton seeds to another registered dealer without charging sales tax, claiming that the sale price should not be included in the taxable turnover as defined in section 2(s) of the Rajasthan Sales Tax Act, 1954. The dealer-assessee did not produce the original or duplicate form S.T. 17 but only a true copy on plain paper. The assessing authority included the sale price in the taxable turnover and taxed it at 3 percent. The Deputy Commissioner (Appeals) deleted the levy of tax, stating it would be against natural justice to charge tax when the purchasing dealer had already paid it. The Board of Revenue upheld this decision, noting that the sub-rule does not envisage a situation where both the original and duplicate are lost, thus allowing secondary evidence.

Issue 2: Consideration of Secondary Evidence
The Board of Revenue's Division Bench observed that sub-rule (7) of rule 25C does not provide for a situation where both the original and duplicate forms are lost. Therefore, in such cases, secondary evidence could be relied upon. The appellate authority and the single Member of the Board allowed the deduction from the taxable turnover based on secondary evidence, including a certificate from the purchasing dealer and an affidavit from the dealer-assessee.

Court's Findings:
The High Court noted that under section 2(s) of the Act, taxable turnover excludes sales covered by a declaration as required under the Act or the Rules. Rule 25C(1) mandates that the dealer must submit the original declaration form S.T. 17 with the return. Sub-rule (7) allows for the submission of the duplicate form in case of loss of the original. The High Court emphasized that the submission of the original or, in its absence, the duplicate form is mandatory for claiming exemption. The court cited the Supreme Court's decision in Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer, which held that furnishing the declaration forms is a condition for claiming exemption and must be strictly complied with.

The High Court concluded that the Deputy Commissioner (Appeals), the single Member, and the Division Bench of the Board erred in allowing the exemption without the mandatory forms. The reliance on secondary evidence was incorrect as the rules explicitly require the original or duplicate forms for claiming exemption.

Conclusion:
The application treated as a revision under section 13(1) of the Amendment Act was allowed. The orders of the Deputy Commissioner (Appeals), the single Member, and the Division Bench of the Board were set aside. The assessment order dated 30th September, 1970, was restored, including the sale price of Rs. 8,056 in the taxable turnover and levying tax at 3 percent amounting to Rs. 241.68. No order as to costs was made as nobody appeared on behalf of the dealer-assessee.

Application allowed.