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1993 (9) TMI 347 - HC - VAT and Sales Tax
Issues involved: Interpretation of Section 3-B of the U.P. Sales Tax Act regarding liability for false certificates; Validity of Form 3-A under Rule 12-A of the U.P. Sales Tax Rules.
Interpretation of Section 3-B of the U.P. Sales Tax Act: The revision petitions were filed against an order by the Sales Tax Tribunal, Kanpur, which denied the benefit of sales against Form 3-A to the dealer for assessment years 1978-79 and 1977-78. The issue revolved around whether the dealer, who received disputed forms, should be held responsible for the misuse of those forms by others. The Counsel for the revisionist argued that as per Section 3-B of the U.P. Sales Tax Act, a person issuing false certificates is liable for the tax, not the dealer who acted in good faith. On the contrary, the Standing Counsel contended that since the disputed forms were found to be non-genuine, the dealer was not entitled to the benefit of those forms. Validity of Form 3-A under Rule 12-A of the U.P. Sales Tax Rules: Form 3-A, issued under Rule 12-A of the U.P. Sales Tax Rules, requires specific details to be filled in by the issuing officer. The responsibility of the selling dealer, who accepts Form 3-A, is to check for any detectable defects, not to verify the authenticity of the form extensively. The judgment highlighted that there is no provision in the Act imposing liability on the selling dealer if the forms are later found to be misused. The authorities below did not provide substantial evidence to prove that the dealer acted negligently or in bad faith by accepting the disputed forms. Therefore, the Tribunal's decision denying the benefit of Form 3-A to the dealer was deemed unsustainable, and the dealer was held entitled to the benefit of those forms. Conclusion: The High Court set aside the Tribunal's decision and directed them to pass necessary orders in accordance with the judgment, emphasizing that the dealer should not be denied the benefit of Form 3-A unless there is clear evidence of negligence or bad faith on the dealer's part.
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