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TMI Blog1962 (11) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... l Tax Officer who made the order of assessment conceded that the sales of these tractors to the four factories are covered by "C" forms so that, according to him, there was compliance with the relevant provisions of the Act to that extent. But he stated: "It was however found that these sales cannot claim assessment at the concessional rate in view of the fact that the tractors were not for resale or used in the manufacture of goods for sale; this turnover was therefore proposed to be assessed at 2 per cent." The view was taken by the assessing authority that goods which are not directly relatable to the manufacturing process cannot get the concession. Observing that "tractors cannot by any stretch of imagination be construed to be directly related to tea manufacture", the relevant turnover was assessed at 2 per cent. The assessee appealed to the Appellate Assistant Commissioner, before whom it contended that the view taken by the assessing authority was very narrow and that the use of the tractors for the purpose of transporting tea leaves from the tea garden to the factory and also labourers from one place to another brought the tractors within the scope of the expression used " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power." This sub-section is the result of an amendment effected by Act 31 of 1958 which came into force on the 1st of October, 1958. The section as it stood previously was not materially different. But it is worthwhile extracting the section as it stood. Section 8(3): "The goods referred to in sub-section (1)- (a) ............................................................... (b) in any other case, are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or for use by him in the manufacture of goods for sale or for use by him in the execution of any contract." That this clause refers to goods other than declared goods is admitted and the goods in the present case are also of that description. A bare reading of these two sub-sections shows that a dealer is liable to tax at one per cent. on his inter-State turnover when he sells to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r case and has also to certify that these goods are covered by his certificate of registration. This form of declaration so obtained by the selling dealer has to be submitted by the selling dealer along with his returns. The Central Sales Tax (Madras) Rules, 1957, make detailed provisions in this regard. That, in the present case, the purchasing dealer of Kerala State did furnish the required declarations in form 'C' is not denied. The question therefore resolves itself into ascertaining whether, in so far as the selling dealer whose turnover is brought to tax is in question, he has complied with the requirements of the law and brought himself within the scope of section 8(1) of the Act entitling him to the lower rate of taxation thereunder. There is no doubt that in the present case when the assessee Messrs Stanes Motors sold the tractors to the tea estates in question, they were placed in possession of the declarations in form 'C' and these declarations which are in the prescribed form were submitted in due course along with their returns. Is it open to the department then to say that notwithstanding that the selling dealer has complied with all the requirements, which confer up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selling dealer becomes under law entitled to the benefit of section 8(1) of the Act. It is no function of the selling dealer to enter into a judicial examination of whether the goods are in fact used or usable for the manufacture or processing of goods for sale by the purchasing dealer. The purchasing dealer declares that they are required for such a purpose and are further so specified in his form of registration granted by the Sales Tax Authorities. It is not the function of the selling dealer to enquire whether the requirement of the purchasing dealer is bona fide or even is or is not within the certificate of registration of that dealer. It must not be forgotten that this is a sale in the course of inter-State trade, the selling dealer doing business in one State and the purchasing dealer in another. It would obviously be impossible for the selling dealer to satisfy himself of the reality of the requirement of the purchasing dealer. It is precisely for that reason that in so far as the eligibility of the selling dealer to the concessional rate of taxation is concerned the relevant provisions of the Act and the Rules make it dependent only on the production of the declaration fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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