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TMI Blog2002 (11) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... ls in foodgrains, rice, etc. For the assessment year 197778, under the U.P. Sales Tax Act, the petitioner disclosed purchases of rice amounting to Rs. 11,03,611.24 in the capacity of commission agent acting for and on behalf of ex-U.P. principal. The goods so purchased were despatched outside the State of Uttar Pradesh on the instruction of the ex-U.P. principals. However, at the time of making the purchases in question, the petitioner had issued declaration form III-C(1) to the selling dealer from whom it had made the purchases. According to the petitioner rice being a declared commodity under section 14 of the Central Sales Tax Act, 1956, has been notified for being taxed at 4 per cent at the point of first purchase by the State Government. The petitioner claimed exemption on the purchases of rice in question, on the ground that it had made purchase for and on behalf of its ex-U.P. principals and, therefore, the purchases having been made during the course of inter-State trade or commerce is not liable to tax under section 3-D of the Act. The petitioner relied upon a decision of this Court in Commissioner of Sales Tax v. Hanuman Trading Company [1979] 43 STC 408; 1979 UPTC 809. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of inter-State trade or commerce as liable to tax in the State of U.P. under the provision of section 3-D of the Act, in that event, the provisions of section 12-A(2)(a) would be violative of articles 286(1), 269, 301 and 304 of the Constitution of India. He next submitted that under article 269(1)(g) of the Constitution of India, on a sale and purchase which took place in the course of inter-State trade or commerce, Government of India alone "can" levy and collect taxes and in view of provisions of article 246(1) of the Constitution of India, the Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule, i.e., Union List. He referred to the provisions of entry 92-A of the Union List which provides for levying tax on the sale or purchase of goods other than newspapers where such sale and purchase took place in the course of inter-State trade or commerce. According to him, Parliament has already enacted the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act") for levy of tax on the sale or purchase of goods in the course of inter-State trade or commerce and the State of U.P. has no jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 12-A cannot be applied to a transaction covered by section 3 of the Central Sales Tax Act and it will be applied only where exemption is being claimed under section 3-D of the Act. The aforesaid decision has been followed by this Court in Bishambhar Sahai Surendra Kumar v. Commissioner of Sales Tax, U.P., Lucknow [2004] 135 STC 534; 2000 UPTC 12. 5.. Sri S.P. Kesarwani, learned Standing Counsel, however, submitted that since the petitioner had purchased the rice in question, by issuing declaration form III-C(1), the presumption raised under section 12-A of the Act would be attracted and he would be liable to pay tax by treating them to be first purchases made by the petitioner. He next submitted that rice is liable to tax at the point of first purchase and by virtue of issuing declaration forms III-C(1) to the selling dealer the petitioner has owned up the liability of payment of tax under section 3-D of the Act. He relied upon a decision of the Supreme Court in McDowell Company Limited v. Commercial Tax Officer [1985] 59 STC 277; 1985 UPTC 747. He also relied upon another decision of the Supreme Court in Himatsingka Timber Co. Ltd. v. State of Orissa [1966] 18 STC 235, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but the latter were purely intra-State sales and a tax imposed thereon did not offend article 286(2) of the Constitution of India. 6.. Learned Standing Counsel submits that no tax is being imposed under section 12-A(2) of the Act. It only provides for drawing a presumption that if transaction, purchase or sale has been made by issuing declaration form then in that event the person issuing declaration form would be treated as the first purchaser. Thus, he submitted that the decisions cited by the learned counsel for the petitioner would not be applicable. 7.. Having heard the learned counsel for the parties we find that the honourable Supreme Court in Commissioner of Sales Tax v. Bakhtawar Lal Kailash Chand Arhti [1992] 87 STC 196, has held that where sale or purchase, though effected within the State of Uttar Pradesh occasions the movement of goods sold/purchased thereunder from the State of Uttar Pradesh to other State, it becomes an inter-State sale. Such a sale cannot be taxed by the Legislature of Uttar Pradesh. It is taxable only under the Central Sales Tax Act, 1956. Dealing with the question of issuing form III-C(1) in respect of such purchases, the honourable Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax under section 3-D in respect of any transaction of purchases,(a) any declaration made or certificate issued by him admitting to be the first purchaser and accepting the liability to pay trade tax on purchase of goods, shall be conclusive evidence of his liability to pay the trade tax on purchase of goods, in respect of the transaction specified in such declaration or certificate; (b) the burden of proving the existence of facts and circumstances on the basis of which he claims such exemption from liability shall lie upon him and, in particular, the dealer shall also be liable to disclose full particulars of the person from whom he has purchased the goods in such transaction of purchase; and (c) no such claim shall be accepted unless reasonable opportunity of being heard has been given to the person whose particulars are disclosed by such dealer." 9.. From a reading the above section, it is absolutely clear that the provision of section 12-A(2) of the Act would be applicable only where the dealer claims that he has no liability to pay tax under section 3-D in respect of any transaction of purchases. The purchases in question have been held to be purchases in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well Co. [1985] 59 STC 277 (SC); 1985 UPTC 747 deals with avoidance and evasion of tax and it has been held that even avoidance of tax is not permissible. There is no question of avoidance of such tax liability in the present case. 12.. The learned Standing Counsel relied upon a decision of this Court in Commissioner of Sales Tax, U.P., Lucknow v. Jai Shiv Trading Co. (S.T.R. No. 1121 of 1987) decided on May 6, 1999 wherein this Court has held that the fact that the dealer realised purchase tax and paid the same in the Government treasury and even admitted his liability in the sales tax returns amounts to a declaration by a dealer within the meaning of sub-clause (a) of section 12-A(2) and, therefore, it must be held that the purchases were intra-State purchases and were liable to purchase tax. In the said decision, this Court had held that the authorities have found that it was not established that the movement of goods outside the State of U.P. was occasioned by the purchases. In the present case, the assessing authority himself had found that the purchases, in question, were made for and on behalf of ex-U.P. principal and, therefore, the ratio laid down by this Court in case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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