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TMI Blog1993 (3) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from September 14, 1987. The unit was duly registered as a small-scale industrial unit. After complying with all the conditions laid down in Notification No. 1177 F.T. dated March 31, 1983, the applicant approached the Assistant Commissioner, respondent No. 2, for grant of eligibility certificate. The said Assistant Commissioner, however, by his order dated August 1, 1990 rejected the prayer of the applicant. Hence this application, which was admitted by this Tribunal after condoning the delay. 3.. The main ground for rejection of eligibility certificate is as follows Out of the total investment of Rs. 3,24,896 on plant and machinery, machinery worth Rs. 3,09,096 was claimed to have been purchased from Messrs. Flora Enterprise, Factory 391, S.N. Roy Road, Calcutta-38 and Head Office 32, Ezra Street, Calcutta-700 007 holding R.C. No. PC/1793A dated November 1, 1978. On enquiry it transpired that there was no existence of such a dealer in the given address and the R.C. number originally allotted to Howrah Sheet Engineering of 391, S.N. Roy Road, Calcutta-38. The alleged purchase vouchers were, therefore, found to be spurious and it was held that substantial portions of mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions the bank directly issued cheques or pay orders to the said sellers. Similar action was taken in respect of Flora Enterprise also. The said cheque was handed over to the representative of the Flora Enterprise by the representative of the bank by a forwarding letter. Copy of the letter sanctioning the loan by the bank and the copy of forwarding letter dated March 4, 1988 of the bank to Messrs. Flora Enterprise forwarding the cheque were enclosed with the supplementary affidavit. 7.. It is pertinent to note that though some of the statements are supposed to be within the special knowledge of the Union Bank of India, Mahatma Gandhi Road Branch, it was not made a party in the instant application. It is claimed by the applicant that all the documents enclosed with the supplementary affidavit were produced before the Assistant Commissioner but there is no mention of them in the Assistant Commissioner's order. Neither does it appear that these facts were considered by him and any investigation was made to verify them. 8.. Mr. M.L. Bhattacharyya, the learned Advocate for the applicant, argued that the relevant notification requires the dealer to keep vouchers and other do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are reproduced below: ...................... Provided that the dealer claiming the benefit of this notification shall be so eligible only if he keeps separate accounts in respect of such newly set up small-scale industry,...............keeps vouchers and other documents for purchases of plant and machinery for establishment of such industry.............. Explanation.-For the purpose of this notification "newly set up small-scale industry" shall mean a new industrial unit,- (i) to (iv)............ (v) which is not established solely or substantially with the plant or machinery- (a) of another newly set up small-scale industry which earlier availed of' the exemption under this notification or under Notification No. 1809-F.T. dated the April 1, 1976 and which is not engaged in the business of manufacturing such plant and machinery, or (b) hired, leased or rented from, or lent by, a manufacturing dealer registered under the said Act or the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941). 11.. It will be clear from a reading of the aforesaid relevant portions of the notification that the objective of maintenance of purchase vouchers is three-fold: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following three cases: State of Madras v. Radio and Electricals Ltd. [1966] 18 STC 222 (SC), Chunni Lal Parshadi Lal v. Commissioner of Sales Tax [1986] 62 STC 112 (SC), and P.C.I. Papers (Private) Ltd. v. Additional Commissioner of Commercial Taxes [1995] 96 STC 251 supra; [1990] 23 STA 298 (WBTT). 14.. The case of Radio Electricals [1966] 18 STC 222 decided by the Supreme Court defines the extent of obligation of the selling dealer with regard to the purchases in the context of furnishing declaration forms. It has been held in that case that the seller can have, in transactions of sale and purchase in the course of inter-State trade and commerce, no control over the purchaser. He has only to rely upon the representation made to him. He must satisfy himself that the purchaser is a registered dealer and the goods purchased are specified in his certificate; but his duty extends no further. If he is satisfied on these two matters, on a representation made to him in the manner prescribed, the selling dealer is 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. This decision was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on business under the trade name of Messrs. Howrah Sheet and Engineering at 391, S.N. Roy Road, Calcutta-38. Mr. Majumdar argued that all these facts led to the conclusion that the purchase vouchers were not genuine as the dealer was not in existence. Mr. Majumdar contended that the Assistant Commissioner after due enquiries had found the dealer to be fictitious and it was for the applicant to show that the selling dealer existed at the time of the transaction and this he has failed to do. He submitted that payment by cheque does not ipso facto prove the existence of the dealer. In this connection he referred to Dwaraka Pershad Badari Pershad v. State of Andhra Pradesh [1992] 87 STC 177 decided by the Andhra Pradesh High Court. In that case seven dealers to whom the petitioner claimed to have made sales were found to be fictitious by the Tribunal. It was held that if the petitioner claimed exemption, it was for him to show that he had purchased pulses from the dealers who were in existence. Registration of certain names as dealers with the department would not ipso facto entitle the petitioner to the exemption if the said dealers were found to be fictitious and non-existent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. He, therefore, prayed that the case be decided finally on merit by the Tribunal. 20.. In support of his submission Mr. Bhattacharyya referred to a decision of the Supreme Court in Mahadayal Premchandra v. Commercial Tax Officer, Calcutta [1958] 9 STC 428. The apex Court made the following observations: "........The whole procedure was contrary to the principles of natural justice. The procedure adopted was, to say the least, unfair and was calculated to undermine the confidence of the public in the impartial and fair administration of the Sales Tax Department concerned. We would have, simply on this ground, set aside the assessment order made by the first respondent and remanded the matter back to him for his due consideration in accordance with law; but as the matter is old and a remand would lead to unnecessary harassment of the appellants, we have preferred to deal with the appeal on merits." It may be mentioned that the determination of that case turned on the construction of the definitions of the terms "dealer" and "turnover" given in the relevant statute. It was, therefore, a question of law which was decided by the court. 21.. That case is obviously not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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