9911796707
TMI Blog1973 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... a declaration in the prescribed manner duly filled in and signed by the dealer to whom the goods are sold containing the prescribed particulars in a prescribed form. Rule 28 of the Kerala General Sales Tax Rules (in short the "Rules"), in sub-rule (1), provides for the form in which the declaration is to be made. Form 18 is the form so prescribed and this form shows that the purchasing dealer has to certify that the goods purchased are for use by him as component part of other goods specified in that schedule which he intends to manufacture inside the State for sale. A blank declaration form which is to be used by the purchasing dealer for this purpose has to be obtained from the assessing authority. This is not to be issued as a matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above being the scheme in regard to the furnishing of declaration in form 18, the question that arises in this case is whether the dealer who sells the goods taking declaration forms under form 18 is also bound to see to the use of the goods for which they are purchased by the dealer. In other words, is the selling dealer liable to pay the normal rate of tax and not the concessional rate In case he is not able to show that the goods purchased from him, for which tax at concessional rate alone has been collected on the strength of the declaration forms, are not seen to be used in the manufacture for sale of goods falling within Schedule I. 3.. The petitioner In this case Is dealing In paper and stationery. "Paper (other than newsprint), ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products' coming under the First Schedule of the Act. As the goods so sold are not for use by the purchasers as component part of any other goods mentioned in the First Schedule, the concessional rate allowed under section 5(3) of the Act is not in order." The petitioner objected to this proposal, but notwithstanding this, the proposal was carried out by exhibit P3 order and that is challenged by the petitioner in this petition as unwarranted. 4.. Section 5(3) requires a selling dealer to obtain the prescribed form signed by the purchasing dealer containing the particulars necessary. If the form is in order and the form is duly filled up and it is furnished to the selling dealer, whether the selling dealer would be justified in claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso his responsibility in the matter must necessarily cease. He cannot be expected to see to the actual application of the goods purchased from him. It may not be in his hands to compel the purchasing dealer to use it in that manner. He is selling it to the purchasing dealer on the strength of declaration forms provided to such dealer by the assessing authority. As I have indicated, rule 28 shows that it is not a form issued to all and sundry or as a matter of course. It is a form which, when once issued to a dealer, cannot be transferred by him and for which he holds himself responsible. It is one, the misuse of which will visit the purchasing dealer with very serious consequences. Therefore, the scheme of the Act appears to be that in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be.............. (3) The goods referred to in sub-section (1)...... (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; and in either case include the containers or other materials used for the packing of goods of the class or classes of goods so specified." Dealing with this matter, Shah, J., said: "Indisputably the seller can have in these transactions no control over the purchaser. He has to rely upon the representations made to him. He must satisfy himself that the purchaser is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3)(b) of the Central Sales Tax Act, 1956, applies with equal force to the situation before me. In that view, a selling dealer cannot be penalised for non-use of the goods purchased from him, after furnishing him with declaration forms. He cannot be held responsible if the goods have not been actually used in the manufacture for sale of goods specified in the First Schedule. He will not be, on that account, liable to pay tax more than at the concessional rate. The result is that there is no justification to reopen the assessment by exhibit P1 notice. Exhibit P3 order is bad and is liable to be quashed. It is accordingly quashed. The original petition is allowed. In the circumstances of the case, parties are directed to suffer costs. Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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