1986 (8) TMI 433 - HC - VAT and Sales Tax

Summary

Issues:
1. Liability of tax on stock of foodgrains.
2. Disallowance of benefit of form 3-Ka in paddy sales.

Analysis:
1. The first issue pertains to the liability of tax on stock of foodgrains worth Rs. 14,287.69 as on 2nd September, 1976. The applicant argued that since the stocks had already suffered tax before foodgrains were declared as an essential commodity under the Central Sales Tax Act, they should not be subjected to tax again under the U.P. Sales Tax Act. Reference was made to the case law of Commissioner of Sales Tax v. Chokhani Company, Nautanwa, Gorakhpur, emphasizing that once a commodity has been taxed at one point, it cannot be taxed again at a subsequent stage. On the other hand, the opposing party contended that since foodgrains were not a declared commodity before 1st September, 1976, they did not suffer tax within the meaning of the Central Sales Tax Act. The court relied on the precedent set by Commissioner of Sales Tax v. Chokhani Company and held that the applicant was entitled to the exemption of section 3-AAA of the U.P. Sales Tax Act regarding the sales of foodgrains.

2. The second issue revolves around the disallowance of the benefit of form 3-Ka in paddy sales amounting to Rs. 6,967.14. The Tribunal stated that the dealer's contention of filing a certificate to rectify defects in form 3-Ka was not supported by the record. Rule 12-B(24) of the U.P. Sales Tax Rules provides for rectifying minor omissions or mistakes in such certificates. Drawing from the case of Shambhoo Nath Dalal v. Commissioner of Sales Tax, it was argued that the assessing authority has a statutory duty to provide an opportunity to rectify defects in forms. The court found that the Tribunal's decision to reject the claim based on the absence of the alleged certificate was not sufficient to fulfill the statutory obligation. Consequently, the court set aside the Tribunal's decision and remanded the matter back to the assessing authority to allow the dealer to rectify the defects in form 3-Ka.

In conclusion, the revision was allowed, absolving the applicant from tax liability on the stock of foodgrains and directing the assessing authority to provide an opportunity to rectify the defects in form 3-Ka for paddy sales. The parties were ordered to bear their own costs.