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TMI Blog2006 (8) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... e case, this court is not satisfied that the seller is not conscious of the provisions of the terms which provides the seller to accept form XVII and the concessional rate of tax in such goods, which could be used as component parts, packing machinery, etc., but whereas in the present case, the seller might be aware that the trolleys sold cannot be used as component parts or packing machinery or the like stated under section 3(3). Hence the entire blame cannot be shifted to the purchaser. However, this is a prima facie opinion and the case has to be decided on merits at the time of final disposal. 2.. In order to safeguard the interest of the seller, which is the subjectmatter of the writ petition, there will be an order of interim stay o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of account. All purchases were covered by proper bills. The dealers are manufacturing and supplying hand-operated and power-operated trolleys, which are not eligible for concessional levy under section 3(3) as it was not consumable, component part, raw material or processing material for the buyer's manufacturing activity. Also it was not included in the eight Schedules for concessional levy under section 3(3). Therefore, the form XVII filed is treated as invalid and proposed to be assessed to tax at 12.6 per cent in notice dated March 27, 2006. The dealer has not filed any objection. Therefore confirm my proposals." As can be seen, while he agreed with the books of account proposed by the assessee, he erroneously came t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged three per cent. There is no dispute about the second requisite being satisfied, for the purchaser is undoubtedly a dealer. The misapprehension of the department is particularly in respect of the third requisite. The assessee satisfies the requisite, if he complies with the proviso, and he is not called upon, beyond production of a declaration in form XVII, to show that the declaration has been given effect to. It is true that, in order to satisfy the third requisite, the goods sold should be for use by a purchasing dealer as component parts of some other goods to be manufactured. But the manner in which the seller has to satisfy the requisite is as provided in the proviso to the subsection, namely, production of the declaration in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. That would make the working of the Act and rule unworkable." On the question of liability of the seller, the Supreme Court in its judgment at pages 120 and 121 held as follows: ". . . This court observed that indisputably the seller could have in these transactions no control over the purchaser. He had to rely upon the representation made to him. He must satisfy himself that the purchaser was a registered dealer, and the goods purchased were specified in his certificates but his duty extended no further. If he 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 obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the rule. An interpretation which will make the provisions of the Act effective and implement the purpose of the Act should be preferred when possible without doing violence to the language. The genuineness of the certificate and declaration may be examined by the taxing authority but not the correctness or the truthfulness of the statements. The sales tax authorities can examine whether certificate is 'farzi' or not, or if there was any collusion on the part of selling dealer--but not beyond--i.e., how the purchasing dealer has dealt with the goods. " In the light of the clear pronouncement of this court as well as the Supreme Court, we think that the claim made by the appellant/petitioner in the writ petition is bound to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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