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TMI Blog1991 (4) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicant-dealer before the Commercial Tax Officer in support of his claim for lower rate of tax under section 5(1)(aa) of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as "the Act" for the sake of convenience). The first grievance of the applicant about the enhancement of the gross turnover has already been adjudicated in favour of the applicant by the West Bengal Commercial Taxes Tribunal. The application under article 226 of the Constitution is thus directed against the rejection of the declaration form submitted by the applicant-dealer. The declaration form was rejected by the Commercial Tax Officer as well as the appellate authority and the revisional authority, the West Bengal Commercial Taxes Tribunal. 3.. The declaration form related to alleged sales made by the applicant to Messrs. Johnson and Company against 11 bills for a sum of Rs. 2,31,091.95. The learned Commercial Tax Officer found that the declaration form, bearing No. E/1/001443, was issued by Messrs. Johnson and Company, 49/1, Banchharam Akrur Lane, Calcutta-12 and that the registration certificate of the firm, being RC No. SI/2869A, had been cancelled on March 3, 1972, under departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an affidavit-in-opposition. The case of the respondents is that on an inspection, it came to light that Messrs. Johnson and Company was not in existence during the material time. As such, the registration certificate of the purchasing dealer was cancelled with effect from March 3, 1972. The Commercial Tax Officer did not allow the declaration form to be taken into account as the purchases sought to be covered thereby were not bona fide and the registration certificate of the dealer stood cancelled. The declaration form sought to cover purchases worth Rs. 2,31,091.95 which allegedly took place during the period from January 23, 1972 to March 29, 1972 on the basis of a single agreement dated November 28, 1971. The goods were supplied in pursuance of a single order. The sales covered by the declaration form were concluded only on March 29, 1972. As the registration certificate was cancelled with effect from March 3, 1972, the declaration form, which was kept undated and which must have been issued on a date subsequent to March 29, 1972, was issued by a non-existent dealer and, as such, no reliance was placed on it. It is also alleged that the date on which the notification was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer all unused declaration forms remaining in stock with him and the appropriate Commercial Tax Officer shall thereupon cancel the declaration forms so surrendered and report the fact of such cancellation to the Commissioner. Under rule 27A(6) of the Rules, the Commissioner shall, from time to time, publish in the Calcutta Gazette the particulars of declaration forms which have been cancelled under sub-rule (4) or in respect of which reports have been received by a Commercial Tax Officer of loss or destruction or theft of declaration forms under sub-rule (3) of rule 27A of the Rules. Apart from such publication of declaration forms which have been cancelled or lost or destroyed or stolen, the Commissioner of Commercial Taxes is also to publish in the Official Gazette under section 9 of the Act the name and address of every dealer who is registered or whose certificate of registration is amended or whose registration is cancelled as soon as may be after the registration, amendment or cancellation, as the case may be, together with the date thereof and a description of the goods covered by the certificate of registration. Rule 27AA of the Rules lays down the procedure for obtainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al) (Jasodalal Ghosal Pvt. Ltd. v. Commercial Tax Officer) and [1974] 33 STC 292 (Cal) (Phanindra Nath Manna and Company v. Commercial Tax Officer) in support of this contention. 9.. A scrutiny of the provisions in section 5(2)(a)(ii) of the Act and rule 27A of the Rules goes to show that a selling dealer has to rely on the representations made to him by the purchasing dealer. He has no control over the filling up of declaration forms. In the case of And Kumar Dutta v. Additional Member, Board of Revenue [1967] 20 STC 528, which was a Division Bench decision, it was held by the Calcutta High Court that the provisions of the proviso to section 5(2)(a)(ii) of the Act read with rule 27A of the Rules and the prescribed form should be treated as directory, which need be substantially complied with. For instance, it was held in that case that omission or error in giving the date of the registration certificate of the purchasing dealer or the misspelling of the name of the purchasing dealer was not a vital or substantial defect to reject the declaration form. Even the omission to date the form when the transactions are all dated or the omission to put the date below the signature was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the concession made before the Tribunal below by the learned advocate for the applicant, the declaration form, though undated, raises a strong presumption in support of the claim for deduction for the period up to March 3, 1972, when the registration certificate of the purchasing dealer was cancelled. Sales after closure of business of the purchasing dealer cannot be genuine sales. Sales before cancellation of the registration certificate of the purchasing dealer cannot, however, be doubted simply on the ground that the registration certificate of the purchasing dealer had been cancelled subsequently. There should be some more materials to show that transactions before cancellation of the registration certificate of the purchasing dealer were not genuine and that no sales in fact took place before cancellation of the registration certificate. There is, however, no other material in this case, apart from cancellation of the registration certificate. In these circumstances, the selling dealer is to get the benefit of concessional rate of tax for the sales covered by seven bills, being bills Nos. 21, 22, 23, 24, 25, 26 and 27 during the period from January 23, 1972 to February 25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 and the declaration form was issued by the purchaser for the period up to February 25, 1957. In that case the assessee made all the payments in cash. He was given a chance to produce the orders and the challans, but he failed to do so. The declaration forms which were produced in respect of sales did not indicate the purpose for which the purchases were being made. The Division Bench held in that case that there was no reliable document to establish that the sales were in fact effected to a registered dealer as the purposes of purchases were not indicated in the declaration forms, the selling dealer could not produce any order for sales made or any challan in support of delivery of goods, and all the payments were made in cash. On the facts of that case it was held by the Division Bench that the taxing authorities were justified in rejecting the claim for deduction in respect of sales during the period prior to the cancellation of the registration certificate on January 7, 1957. This case of Hindusthan Stationery Works [1971] 27 STC 394 (Cal) was discussed in the case of Phanindra Nath Manna and Company v. Commercial Tax Officer [1974] 33 STC 292 (Cal), wherein it was held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Supreme Court dealt with several provisions of the Central Act of 1956 and the aforesaid Rules of 1957 and were of the opinion that in transactions in course of inter-State trade or commerce the seller had no control over the purchaser. He had to rely upon the representations made to him. He must satisfy himself that the purchaser was a registered dealer and that the goods purchased were specified in his certificate and that the duty of the seller extended no further. It was held in that case that if the seller was satisfied on these two matters, on a representation made to him in the manner prescribed by the Rules and the representation was recorded in the certificate in form C, the selling dealer was under no further obligation to see to the application of the goods for the purpose for which it was represented that the goods were intended to be used. It was further held in that case that if the purchasing dealer misapplied the goods, he incurred a penalty under section 10 of the Act of 1956, which could not be visited upon the selling dealer. The contention of the learned State Representative is that these provisions in the Central Sales Tax Act regarding the declaration fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation form cannot be rejected is thus to be accepted. The applicant should be allowed concessional rate of tax under section 5(1)(aa) of the Act in respect of the seven bills, numbering 21 to 27, for sales made during the period from January 23, 1972 to February 25, 1972 and the assessment should be modified accordingly. 15.. It appears that by an order passed on February 27, 1978 the West Bengal Commercial Taxes Tribunal stayed realisation of the demand, pending disposal of the revision case No. 502 of 1976-77 against the appellate order dated April 8, 1976 relating to the assessment in question, on deposit of a sum of Rs. 5,000 by the applicant. On deposit of the said sum of Rs. 5,000, there has been a stay of the entire demand. This sum of Rs. 5,000 is to be adjusted against assessment to be modified, keeping in view the observations in this judgment relating to the declaration form in question. 16.. The result is that the application is allowed in part. The order dated March 24, 1975, passed by the respondent No. 3, the appellate order dated April 8, 1976, passed by the respondent No. 2 and the order dated June 11, 1981 passed by the respondent No. 1 are modified. The respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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