1994 (10) TMI 298 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the dealer-revisionist is entitled to exemption if the purchasing dealer's registration was cancelled or the Form III-A was not genuine.
2. Examination of specific transactions in dispute for assessment years 1978-79, 1979-80, and 1980-81.

Summary:

Issue 1: Entitlement to Exemption
The dealer-revisionist deals in iron and steel, taxable at the point of sale to the consumer u/s 3-AAA of the U.P. Sales Tax Act. The dealer claimed exemptions for sales made against Form III-A issued by purchasing dealers. The assessing officer denied these exemptions, citing that some purchasing dealers' registrations were canceled, or the forms were not genuine. The Tribunal upheld this decision. The primary question was whether the dealer, acting in bona fide belief, was entitled to exemption if it was later found that the purchasing dealer's registration was canceled or the Form III-A was not genuine.

Issue 2: Examination of Specific Transactions
1. M/s. Bansal Traders, Bareilly (1978-79): The dealer's sales were made when the purchasing dealer's registration was canceled. The court held that the forms were genuine and issued by the department, and the dealer acted bona fide. Therefore, the sales were exempt from tax.

2. M/s. Kishori Lal Padam Kumar, Muzaffarnagar (1978-79): The Tribunal did not specify the exact date of registration cancellation. The court held that the dealer acted bona fide, and the sales were exempt from tax.

3. M/s. Associated Traders, Shahjahanpur (1978-79): The Tribunal's enquiry was deemed perfunctory. The court held that the dealer acted bona fide, and the sales were exempt from tax.

4. M/s. Kumar Steel Corporation, Fatehpur (1978-79 and 1979-80): The Tribunal's enquiry did not show that the forms were issued to a different dealer. The court held that the dealer acted bona fide, and the sales were exempt from tax.

5. M/s. Paras Nath Kamal Kumar, Rampur (1979-80): The forms were not signed by a Sales Tax Officer and were in a different format. The court upheld the denial of exemption.

6. M/s. United Traders, Aligarh (1979-80): Similar to the above, the court upheld the denial of exemption.

7. M/s. A. S. Steel Corporation, Kanpur (1979-80 and 1980-81): The forms were issued in a preceding year, and the registration was canceled later. The court held that the sales were exempt from tax.

8. National Iron and Steel, Kanpur (1980-81): The purchasing dealer had closed its business, but the court held that the sales were exempt from tax as they were covered by Form III-A.

Conclusion:
The revisions for assessment years 1978-79 and 1980-81 were allowed, and the revision for assessment year 1979-80 was partly allowed. The Sales Tax Tribunal was directed to modify its order in accordance with the directions contained in this judgment.