9911796707
TMI Blog1988 (3) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively for the assessment years 1971-72, 1972-73 and 1973-74. On 23rd February, 1978 the Commercial Tax Officer issued notice proposing to tax turnover to the extent of Rs. 15,42,589, Rs. 18,62,000 and Rs. 12,57,630 respectively for the three assessment years at the full rate of 10 per cent without allowing any concession on the ground that the registration granted to some of the dealers who issued the C forms were cancelled. It was also stated that the C forms issued by some of the dealers were not issued to them by the assessing authorities. The assessee objected to the proposal contending that the transactions of sales to the Bombay dealers were bona fide and in the regular course of business, that the declarations were accepted during the course of the assessment proceedings and after the expiry of three to five years, it is not open to the assessing authority to unsettle the matters. The Commercial Tax Officer rejected the assessee's contention by his order dated 28th March, 1978 and levied tax at 10 per cent. The assessee appealed against the orders of the Commercial Tax Officer before the Assistant Commissioner (Appeals). By his order dated 13th February, 1979 the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of concessional rate of tax. The above discrepancies relate to the assessment year 1972-73. In the notices issued for the assessment years 1971-72 and 1973-74 also there were discrepancies of a similar nature. Basing on the above facts, the Commercial Tax Officer proposed to revise all the three assessments by subjecting inter-State sales to tax at 10 per cent. After receiving the aforesaid notice the assessee requested the Commercial Tax Officer to furnish the addresses of the authorities concerned at Bombay, who conducted the investigation and also to furnish a copy of the report furnished by the said officers, so that he could verify the correctness or otherwise of the statements made in the notice. The Commercial Tax Officer sent a reply to the assessee to the effect that the notices are self-explanatory and no further information was required to be furnished. In that view the Commercial Tax Officer completed the assessments for all the three years by subjecting the inter-State sales to 10 per cent tax ignoring the C forms filed. Against the orders of the Commercial Tax Officer the assessee filed appeals to the Deputy Commissioner (Commercial Taxes), Appeals. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were cancelled five years before the sale of goods. The learned Government Pleader contends that the assessee had been callous in collecting whatever C forms were given to him without taking necessary steps to find out whether the purchasing dealers were eligible to issue the C forms to enable the assessee to be assessed at a concessional rate of tax under the Central Sales Tax Act. The learned Government Pleader points out that it is the elementary duty of the assessee to make the aforesaid investigation. Failure to do so would result in the denial of the assessee's claim for assessment under the Central Sales Tax Act at concessional rate. The learned Government Pleader relied on the decision of the Supreme Court in State of Madras v. Radio and Electricals [1966] 18 STC 222. Sri Dasaratharama Reddi, learned counsel for the assessee, on the other hand contends that there is nothing to indicate that there was any complicity between the assessee on the one hand and the purchasing dealers at Bombay on the other. It was claimed by the learned counsel that the transactions of sale effected by the assessee were in the regular course of business and inasmuch as the purchasing dealers ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after cancellation there was a surrender of the registration certificates and the assessee had entered into transactions with the purchasing dealers, who did not physically possess the registration certificates. As already pointed out there is no allegation to the latter effect. We would also now refer to the Central Sales Tax (Bombay) Rules, 1957. Rule 4-A(4) is in the following terms: "Any unused declaration or certificate forms remaining in stock with a registered dealer on the cancellation of his registration certificate shall, within two working days of the date of cancellation, be surrendered to the Sales Tax Officer from whom the forms were obtained: Provided that, if the dealer fails to surrender any unused declaration and certificate forms as required by this sub-rule, the Commissioner shall, by notification in the Official Gazette, declare that all or any of such forms shall be deemed to be obsolete or invalid with effect from such date as may be specified in the notification, and shall forward a copy of such notification to all other State Governments." It is clear from the above rule that any unused declaration or certificate forms remaining in stock with a reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of rule 4-A(4) were complied with. In the circumstances aforesaid, it is impossible to escape the conclusion that assessee had taken the elementary precaution before effecting the sales to the purchasing dealers or in any event there were no circumstances warranting a suspicion to provoke an investigation into the affairs of the purchasing dealers. In the facts and circumstances, it must be said that the assessee collected the C forms unsuspectingly, filed the same before the authorities at this end and sought relief of taxation under the Central Sales Tax Act. In these circumstances, the assessee must be held to have discharged the initial onus that lay on him to show that the interState sales were covered by C forms issued by the purchasing dealers and the assessing authority is bound to admit the assessee's claim for assessment at concessional rate. We have already referred to the fact that the assessing authority had even declined to place in the hands of the assessee the relevant information to enable him to pursue investigation, obviously under the impression that the information indicated in the notice issued was sacrosanct and the assessee could not be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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