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TMI Blog1998 (11) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase and sale of iron and steel goods. It is duly registered under the provisions of the M.P. General Sales Tax Act, 1958 (for brevity, hereinafter shall be referred to as the Act ) as also under the Central Sales Tax Act, 1956. Petitioner had been observing Diwali to Diwali as accounting year. 3.. In this petition question is with regard to sales effected by petitioner to respondent No. 5, M/s. Dhar Cement Pvt. Ltd. and Aboo Cement Works Pvt. Ltd., commencing from the period November 5, 1983 to October 24, 1984, i.e., Diwali-1983 to Diwali-1984. Assessment for the said year has been completed by respondent No. 1, vide, annexure P1. At the time of assessment, petitioner submitted declarations issued by M/s. Aboo Cement Works Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court, challenging the aforesaid orders. 7.. Respondents have submitted their return in oppugnation. Their sheet anchor of the defence is, that all these sales for which declaration has been submitted by the petitioner, have been made in collusion with the purchasing dealers, basically, with an intention to avoid payment of sales tax on the items which have been sold to these purchasing dealers. 8.. It has not been disputed that exemption on payment of tax in respect of sale of iron and steel can be obtained by the selling dealer against the production of declaration on prescribed form. Such declaration, according to the respondents, have been prescribed under rule 20(2) of the M.P. General Sales Tax Rules, 1959 (for brevity, hereinaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore so, in the face of declaration given by these parties. Reference has also been made to rule 51 of Rules 1959. The relevant rule 51 is reproduced hereinbelow: 51. Acceptance of declaration or certificate.-No selling registered dealer shall refuse to accept any declaration or certificate furnished by a purchasing registered dealer in accordance with any provision of the Act or any rule framed or any notification issued thereunder. 13.. Bare reading of the Rule, makes it abundantly clear that it is not within the domain of the selling dealer to hold an inquiry with regard to the purpose for which the materials have been purchased by the purchasing dealers. It is also not in dispute that both the purchasing dealers are also duly regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not taken. 18.. To advance arguments further, in this regard, petitioner has also placed reliance on a judgment of the Supreme Court, reported in [1986] 62 STC 112 (Chunni Lal Parshadi Lal v. Commissioner of Sales Tax), in which, Supreme Court has held that the genuineness of the certificate and the declaration in form III-A may be examined by the taxing authority, but not the correctness or the truthfulness of the statements made therein. The taxing authority may examine whether the certificate was issued in collusion or was forged or fabricated, but, could not have inquired whether the purchasing dealer had subsequently sold the goods or consumed them. These observations of the apex Court, set the controversy at rest. They have fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober 24, 1984. The impugned orders, in so far as, they rejected the petitioner s prayer for grant of exemption in computation of the total taxable liability stands, hereby quashed. The necessary consequence of this, would be that the penalty which has been imposed on account of refusal to accept the declarations, would automatically stand quashed. The matter has necessarily to be remitted to respondent No. 1, for giving effect and passing an order of assessment afresh, in the light of the observations made above. 23.. The petition, therefore, stands allowed to the extent mentioned above. Parties to bear their own cost. Security cost, if, deposited, be refunded back to the petitioner, after its due verification. Petition allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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