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TMI Blog2003 (10) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in a manner that lacks the care and caution of a reasonable man. Nothing of this sort has been shown in the conduct of the revisionist. Learned Standing Counsel laid stress on an averment made by the assessing officer in the assessment order for assessment year 1981-82 that Sri Arun Kumar the owner of the business in the name of the revisionist had stated that he had been doing business with this party for the past several years and the forms were genuine and that he accepted the responsibility for any defect in the disputed form III-Kha. After the initiation of action u/s 21 no statement of Arun Kumar seems to have been recorded to extract from him any information which may indicate that while entering into the transactions of sale in question and accepting forms III-B, he knew that the said firm do not exist and the forms are forged and fictitious. No information has been gathered about the manner in which the transactions were executed. The payment for the sales were made and the goods were transported. Therefore, from the mere information that the forms in question were not issued by the sales tax department to the two parties referred to above without indicating to whom th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of proceedings under section 21, a show cause notice dated September 27, 1989 was issued. The said show cause notice was replied by the applicant. On the consideration of the show cause notice and its reply, the assessing authority vide its order dated September 30, 1989 passed the assessment order. The assessing authority had disallowed the claim of exemption against the forms III-B to the extent of Rs. 77,02,180 and levied tax at Rs. 4,85,237.35. The dealer filed appeal before the Deputy Commissioner (Appeal), Saharanpur which was allowed in part. The applicant filed second appeal before the Tribunal, Saharanpur, which was rejected. Being aggrieved by the said order, the present appeal has been filed. 3. During the course of hearing by this Court on March 11, 2003, the Standing Counsel was directed to produce the assessment record and to file copies of disputed forms. The Standing Counsel filed counter-affidavit, in which, a details of disputed forms against which the claim was disallowed and reasons for disallowed was also stated. The photostat copies of form III-B was also submitted on the basis of which, exemption was claimed, along with the letters of various assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the firm was cancelled on January 9, 1984. In the assessment year 1984-85 the firm was not registered hence, the benefit of form III-Kha cannot be given. Form III-Kha No. 115023 Disallowed amount. 20,09,249. 5. S/Sri Kumar Packers, Meerut The form III-Kha No. 154525 was issued for Rs. 10,604 and for Rs. 8,344. An information was received that this form has been issued to dealer only for Rs. 10,604 and for rupees 8,344 another form No. 154526 was issued which have not been produced by the dealer and the revisionist has clubbed both the amount of Rs. 10,604 and Rs. 8,344 in form No. 154525 and has failed to prove that only one form No. 154525 was issued by the firm, hence, benefit of Rs. 8,344 was not accepted. Form III-Kha No. 154525 Disallowed amount. 8,344 6. S/Sri Bareilly King Industries, Bareilly. Rs. 84,816 was claimed on form III-B No. 123963 and in investigation it was found that this form was issued only for Rs. 46,244 and for Rs. 38,572 no other form III-Kha has been produced by the revisionist, hence, no benefit has been granted on Rs. 38,572. Form III-Kha No. 123963 Disallowed amount. 38,572 7. S/Sri Envelop India Co. Bareilly. Information was received from the T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be taken under the provisions of the Act against such dealer and not against the applicant. In support of his contention, he placed reliance on the decisions of this Court in the case of Indra Steels Private Ltd., Ghaziabad v. Commissioner of Sales Tax 1995 UPTC 4, Gaurav Trader, Meerut v. Commissioner of Trade Tax, U.P., Lucknow reported in (1996) 9 NTN 262 and the latest judgment in Commissioner of Sales Tax v. Rana Steel, Saharanpur reported in (2003) 22 NTN 218. 6.. The learned Standing Counsel placed reliance on the orders of assessing authority, first appellate authority and the Tribunal. 7.. Before dealing with the objection relating to each individual forms, it is necessary to refer provisions of the Act and the law laid down by this Court in this regard: Section 4-B(1)(a): Where any goods liable to tax under sub-section (1) of section 3-D are purchased by a dealer who is liable to tax on the turnover of first purchases under that sub-section or where any goods are purchased by any dealer in circumstances in which such dealer is liable to purchase tax in respect thereof under section 3-AAAA and the dealer holds a recognition certificate issued under sub-section (2) in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that behalf on the notice board of his office, stating therein the name, address and other particulars of the dealer whose recognition certificate is cancelled or amended, specify in the order of cancellation or amendment the date from which such cancellation or amendment shall take effect, and shall send a copy of the order to the dealer. Where the certificate is cancelled or amended in accordance with sub-rule (9), the dealer shall, within fifteen days from the date of receipt by him of the copy of the order of cancellation or amendment, surrender to the Sales Tax Officer all copies of the recognition certificate held by him. Rule 25-B(1): Where a dealer holding a recognition certificate purchases any goods referred to in clause (b) of sub-section (1) of section 4-B for use as raw material for the purpose of manufacture of any notified goods, he shall, if he wishes to avail of the concession referred to therein, furnish to the selling dealer a certificate in form III-B (hereinafter called a 'declaration form'). 8. Section 4-B of the U.P. Trade Tax Act contemplates special relief to certain manufacturers in the matter of levy of sales tax. Sub-section (2) of this secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act and the Rules framed thereunder, which entitled them to a concessional rate of tax, were rightly so included in the certificate of registration or not. The Supreme Court held that while it may be open to the assessing authority to scrutinize the certificate to find out whether the certificate was genuine, normally it would not be open to him to question the wisdom of the authority which issued that certificate including a particular article therein. Following this decision a division Bench of the Bombay High Court in Bowen Press v. State of Maharashtra [1977] 39 STC 367 held that normally it would not be open to the assessing authority to refuse the benefit of the inclusion of an article in the recognition certificate in the matter of exemption or concession in the rate of tax where it could not be in dispute that the selling dealer had made the sale to a purchaser who had produced a genuine recognition certificate mentioning that article in it. 11. In the case of Bharat Iron Stores v. Commissioner of Sales Tax reported in 1994 UPTC 130 this Court observed as follows: The liability of the selling dealer, who accepts form III-A is only to check them to ensure that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me other parties as well and on enquiries nothing adverse had been found. So far as M/s. Loha Krishi Udyog is concerned the only information gathered by the assessing officer was that no such firm was registered at Bareilly. None of the authorities below has recorded any finding that the forms III-B issued by the purchasers in the name of M/s. Ratesh Steel, Kanpur, or M/s. Loha Krishi Udyog, Bareilly, were not the forms printed by the Government and issued by the sales tax department. The forms are statutory forms and have to be issued by the Sales Tax Officer under his seal and signature and he has to fill in the form the various details including the name of the dealer to whom the certificate is issued and his registration number. The disputed forms were produced before me by the learned Standing Counsel that purport to bear the seal of the Sales Tax Officer mentioning the name of the officer and bearing his signatures. No information has been collected by the department to the effect either that the seal or the signatures of the officer were forged or that these forms were issued to some other dealer and the original particulars of the dealer filled in by the issuing authority w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which may indicate that while entering into the transactions of sale in question and accepting forms III-B, he knew that the said firm do not exist and the forms are forged and fictitious. No information has been gathered about the manner in which the transactions were executed. The payment for the sales were made and the goods were transported. Therefore, from the mere information that the forms in question were not issued by the sales tax department to the two parties referred to above without indicating to whom they were actually issued, the present revisionist cannot be assumed to have any guilty intention to avoid payment of tax by accepting the disputed forms. In my view therefore, the Tribunal's finding that the dealer was wrongly allowed exemption in the original assessment or that the transactions of sales purporting to have been made to the two parties against form III-B were liable to tax is legally erroneous. The sales in question were granted exemption in the original assessment and no good reason had been made out to withdraw that exemption and bring to tax the sales in question. 16. Now in the background of the principle of law laid down in the cases referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Lucknow for Rs. 7,706.35 and Rs. 9,867.60. The perusal of the assessment order shows that in respect of these two forms also the proper enquiry was not made. If the information was that these two forms have not been issued by M/s. Kishore Enterprises, Unnao, to the applicant and have been issued to the parties of Agra and Lucknow, the assessing authority should have made the enquiry from M/s. Kishore Enterprises, Unnao. In case if there is any denial on the part of M/s. Kishore Enterprises, Unnao, about the issuance of those two forms to the applicant, the opportunity of the cross-examination to such parties should be given to the applicant before drawing any adverse inference. Further the enquiry should be made that whether M/s. Kishore Enterprises, Unnao, has actually made purchases from the applicant to the extent of Rs. 36,87,178 and for Rs. 1,20,993 or not and for this the bills, the mode of supply and mode of payment, etc., should be examined. It is further to be enquired whether M/s. Kishore Enterprises, Unnao, had made any transaction of purchases from the alleged Agra and Lucknow parties to whom, as per information the forms were issued for Rs. 7,706.35 and Rs. 9,867. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanpur Form No. 115023 for Rs. 20,09,249 Claim of exemption against form No. 115023 was disallowed on the ground that the registration of M/s. Rattan Paper Converters, Kanpur, was cancelled on January 9, 1984 while the firm subjected to the transactions after April 9, 1984. In this case, it is not disputed that M/s. Rattan Paper Converters, Kanpur, was registered dealer and the aforesaid disputed form was issued to it and the form was genuine. It is not the case that the applicant was aware about the cancellation of the registration on January 9, 1984, still, received the form. In the circumstances, it cannot be said that the applicant has not received form bona fidely and thus the benefit against the aforesaid form cannot be denied to the applicant. For the mistake committed by M/s. Rattan Paper Convertors, Kanpur, the necessary action can be taken against it. M/s. Kumar Packers, Kanpur Form No. 154525 for Rs. 8,344 The claim for Rs. 8,344 was disallowed on the ground that as per information in respect of the said amount, M/s. Kumar Packers, Kanpur had issued another form No. 154526 while the amount of Rs. 8,344 is added in form No. 154525 along with another transaction for Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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