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PETITIONER: COMMISSIONER OF SALES TAX A

       Vs.

RESPONDENT: PRABHUDAYAL PREM NARAIN

DATE OF JUDGMENT26/07/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR 1775            1988 SCR  Supl. (1) 583  1988 SCC  Supl.  729     JT 1988 (3)   542  1988 SCALE  (2)306

ACT:      U.P. Sales  Tax Act  1948/U.P. Sales  Tax Rules,  1948. Section 3D(7)(b)/Rule  12B &  Notification No.  ST-111-2712- Exemption  from  tax-Dealer  entitled  to  claim  only  when declaration forms furnished.

HEADNOTE:      The respondent  a dealer  in pulses,  claimed exemption under s.  30(2) of  the U.P.  Sales Tax  Act, 1948  for  the assessment  year   1977-78  contending  that  the  purchases affected by  him prior  to 1.5.1977  could not be subject to tax. The  assessing authority and the Assistant Commissioner (Judicial) rejected  the assessee’s claim for exemption from tax. D       on appeal, the Tribunal was of the view that since the assessee  had  not  furnished  Form  IlI-C(I),  he  was  not entitled to any exemption under s. 3-D of the Act.       The  High Court  allowed the  revision petition on the ground that  as the  Tribunal had  not gone  into the  proof furnished by the assessee before the assessing authority and the Assistant  Commissioner (Judicial)  in  support  of  his claim for  exemption, and  remitted the  matter back  to the Tribunal, directing  it to consider the question whether the dealer was entitled to get any exemption on the basis of the evidence that he had furnished.      In the appeal to this Court, it was contended on behalf of the  Revenue-appellant that  the  High  Court  was  wrong because, in  view of  s. 3D(7-B) of the Act the assessee was not  entitled   to  lead   any  other  evidence  apart  from submitting the registered dealer Form No. III-C(2).      Allowing the Appeal, ^      HELD: 1.  The High  Court was in error in directing the Tribunal to  consider the  matter on  further evidence.  The assessee is  entitled to  exemption only  on furnishing  the declaration forms.  Since he  did  not  do  so,  he  is  not entitled to the exemption. [586E] 584      2. Under  section 3-D(7)  declaration forms  have  been prescribed by  Rule 12-B.  The provision should be construed as mandatory.  If the  dealer had not furnished the required

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declaration forms  in order to be entitled for exemption, he cannot file  any other  evidence which  he re  quires to  be considered by the axing authorities[1586D].      Kedar Nath Jute Mfg. Co. Ltd. v. Commercial Tax Officer JUDGMENT:      M/S Govind  Ram Tansukh Ram Tansukh Rai & Co. Budaun v. Commissioner  of   Sales  Tax,  U.  P.,  [1985]  UPTC  1960, approved.      Abdul Ghani  Banne Khan  v. CST.,  1982 UPTC 665, over- ruled.

&      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2506(NT) of 1988.      From the  Judgment and  order dated  18-8- 1982  of the Allahabad High Court in S.T.R. No. 89 of 1982.      S.C. Manchanda,  R.S. Rana  and A.K. Srivastava for the Petitioner.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J.  Notice  was  issued  on  this special leave  application stating  that the matter would be disposed of  finally at  the notice  stage itself.  None has appeared pursuant  to the  notice. We  have  considered  the matter and heard Shri Manchanda, counsel for the petitioner. Special leave  is granted  and the  appeal is disposed of by the judgment herein.      This appeal  arises from  the judgment and order of the High Court  of Allahabad,  dated 18th August, 1982. The said judgment was  delivered  on  a  revision  application  filed before the  High  Court.  The  application  related  to  the assessment year  1977-78 under  the U.P.  Salex Tax Act. The first question  involved before  the High Court of Allahabad was whether  the purchase of pulses effected by the assessee prior to  1.5.1977 could  be subjected  to tax under Section 30(2) of  the Sales  Tax Act.  The Tribunal  held that these could be so subjected.      The High Court referred to the Notification No. ST-III- 2712/X-      6(2)-77 U.P.  Act  XV-48-order-77  and  held  that  the contention of the 585 assessee could  not be  accepted that  he had  purchased the pulses in  question before  1st  May,  1977.  There  was  no dispute on  this contention  raised subsequently.  The  only contention that was urged before the High Court was that the Asstt. Commissioner (Judicial), was about granting relief to the assessee  in  respect  of  his  turnover  on  pulses  of Rs.3,75,500 to  the extent  of Rs.3,19,673  on the  basis of certain  evidences   that  had   been  produced  before  the assessing  authority   and  the   Asstt.  Commissioner.  The Tribunal was  of the  view that  since the  assessee had not furnished  From   IIl-C(1),  he  was  not  entitled  to  any exemption under  Section 3-D  of the Act. It appears that in the case  of Abdul Ghani Banne Khan v. CST, [1982] UPTC 665, a learned  Single Judge  of the High Court of Allahabad held that on  the language  of Section  3D(7-b), the assessee was entitled  to  lead  evidence  to  the  satisfaction  of  the assessing authority  that the  sale was made to a registered dealer and was not confined only to furnishing form IIIC(2). There was,  however, an  earlier decision to the contrary in the case  of Commissioner  of Sales  Tax v.  Kailash Trading Co., [1981]  UPTC 82  1 of  the same  Court which  has  been referred to in this case.

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    In the  judgment under appeal the High Court was of the view that  as the  Tribunal had  not  gone  into  the  proof furnished by the assessee before the assessing authority and the A.C.  (J) in  support of  his claim  for exemption which according to the decision in Abdul Ghani Banne Khan (supra), should be  examined by  the Tribunal, it remitted the matter to the  Tribunal. In the premises the High Court allowed the revision and  remitted the  matter back  to the Tribunal and directed it  to consider the question whether the dealer was entitled to  get any  exemption on the basis of the evidence that he  had  furnished.  According  to  the  appellant  the revenue, here  the High  Court was  wrong because in view of Section 3D(7-b)  of the Act, he was not entitled to lead any other evidence  apart  from  submitting  to  the  registered dealer Form  No. III-C(2).  Clause (b) of sub-section (7) of Section 3-D provides as follows:           "Every sale  within  Uttar  Pradesh  by  a  dealer           either directly  through another,  whether on  his           own account  or on account of any one else. shall,           for the  purposes of  subsection (2), be deemed to           be a  sale to  a person  other than  a  registered           dealer, unless the dealer selling the goods proves           otherwise to  the satisfaction  of  the  assessing           authority after  having furnished such declaration           or certificate,  obtained from  the  purchaser  of           such goods,  in such  form and  manner and  within           such period, as may be prescribed." 586      Under the  said Section,  declaration forms  have  been prescribed by  Rule 12-B.  It  appears  that  this  question stands concluded so far as the U.P. is concerned, by a Bench decision of  the said  High Court in the case of M/s. Govind Ram Tansukh  Ram Tansukh Rai & Co. Budaun v. Commissioner of Sales Tax,  U.P., [1985],1060.  There, after considering the aforesaid two  decision of  the learned  Single Judges,  the Division Bench  held that  if the assesses had not furnished the required  declaration forms  in order to be entitled tor exemption, the  assessee could  not file  any other evidence which required to be considered by the taxing authorities.      In that view of the matter the decision of the Division Bench must  prevail. This  also follows  logically from  the decision of  this Court  in Kedar Nath Jute Mfg. Co. Ltd. v. Commercial Tax  officer &  Ors.,16 STC 607, where this Court while dealing  with  similar  provisions  under  the  Bengal Finance Sales  Tax Act,  held that  the dealer  could  claim exemption  on   the  sales   to  the  registered  dealer  by furnishing the  declaration form and unless such declaration forms are  furnished, the  dealer was  not entitled  to  any exemption. This Court further reiterated that the provisions of this  nature should  be construed  as mandatory.  [n that view of the matter there is no scope for taking any contrary view. In  the premises, the High Court in the impugned order was in  error hi  directing the  Tribunal  to  consider  the matter on  other  evidence.  The  assessee  is  entitled  to exemption only  on furnishing  declaration forms.  Since the assessee did not do so, he was not entitled to exemption.      The appeal  is allowed  and the  decision of  the  High Court is  set  aside  and  the  order  of  the  Tribunal  is restored. There will be no order as to costs. N.V.K.                                  Appeal allowed. 587