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TMI Blog1978 (4) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... should have been allowed? (2) Whether or not upon a true and correct interpretation of clause (iv) of section 14 of the Central Sales Tax Act, 1956, 'wire' and 'wire-nails' should be considered as goods of special importance within the meaning of that section?" The facts found and/or admitted in the proceedings below are shortly as follows: M/s. Hind Wire Industries, the assessee, is a manufacturer of wire and wire-nail. In respect of sales tax assessment for the year ended Asar Sudi 1, 2018, corresponding to 14th June, 1961, the assessee disclosed a gross turnover of Rs. 50,70,886.51 and claimed deduction under section 5(2)(a)(ii) of the said Act, inter alia, in respect of two registered dealers, namely, M/s. Reliance Supply Agency and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, that in the transactions by and between the assessee and the said two registered dealers, the proceeds were received entirely in cash although large sums were involved. He also confirmed the findings that the registered dealers were not carrying on genuine business for some time-the certificates of registration of both the said dealers were ultimately cancelled, Bharati Distributors were found to be untraceable, its business premises were found to be closedand that the sales were made to various unregistered dealers but with a view to avoid the incidence of sales tax the proceeds were shown to have been received from the said two registered dealers against their declaration forms. The Additional Commissioner called for the stock book en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The revision petitions of the assessee were rejected. The present reference has 'been initiated at the instance of the assessee from the aforesaid order of the Board of Revenue. Mr. S.R. Sen, learned counsel for the assessee, did not press question No. (2) on instruction. Accordingly, we decline to answer the same. On question No. (1), Mr. Sen contended that on the facts found the authorities had no ground whatsoever to disallow the deduction claimed under section 5(2)(a)(ii) of the said Act. He contended further that it had been found that the assessee had sold the goods to dealers who were registered at the material time who had also supplied declaration forms. The fact that the certificates of the said dealers were subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court held that the orders of the departmental authorities, including the Tribunal, disclosed that prima facie the assessee had complied with the requirements of the statute and the Rules, for the purpose of claiming deductions. Whether, in the event of the purchasing dealers being found to be bogus and fictitious persons, the assessee would lose the benefit of the deductions claimed by him in the absence of any collusion or mala fides would be a question of law and would require examination by the High Court. The Supreme Court allowed the appeals of the assessee and set aside the order of the High Court. It was ordered that the High Court would direct the Tribunal to state a case and refer the questions. Mr. Sen also cited a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich had not been challenged were sufficient to entitle the authorities to reject the claim for deduction. He cited a decision of the Supreme Court in Commissioner of Income-tax, West Bengal II v. Durga Prasad More[1971] 82 I.T.R. 540 (S.C.)., in support of his contentions. It appears to us that the Commercial Tax Officer after considering the facts and circumstances came to the conclusion that the transactions in respect of which the assessee claimed exemption were paper transactions made to cover up sales to unregistered parties. This finding was confirmed by the Additional Commissioner who held that the sales were actually made to various unregistered dealers but were shown to have been made to alleged registered dealers. The Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction appears to have been made between the fact admitted or found, the conclusions of fact deduced therefrom and the conclusion of the Board on law on which the finding is based. Only part of the arguments advanced at the final hearing before the Board have been set out in the statement. The Act has been in force since 1941 and it is expected that after over 30 years, the authorities concerned would be sufficiently aware as to what a statement of case should contain. Statements drawn up by the Income-tax Appellate Tribunal may serve as useful guides. We expect that the authorities concerned will take note of these observations and take steps so that in future proper statements are drawn up. This will lead to better utilisation of judici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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