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The Commissioner, Trade Tax U.P. v. S/S Dinesh Chandra And Sons, Hathras - SALES/TRADE TAX REVISION No. 1430 of 1994  RD-AH 357 (23 July 2004)
TRADE TAX REVISION NO.1430 OF 1994
The Commissioner, Trade Tax, U.P. ....Applicant
S/S Dinesh Chandra & Sons, Hathras. .....Opp.Party
Hon'ble Rajes Kumar, J.
This revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 04.07.1994 relating to the assessment year 1989-90 under the Central Sales Tax Act, by which Tribunal has deleted the penalty levied under section 15-A (1)(l) of the Act.
Brief facts of the case are that applicant purchased kapas within the State of U.P. against Form-3-A and after ginning sold cotton inside the State of U.P. and paid the tax. In the processing of ginning Binola was obtained as by-product, which was despatched outside the State of U.P. Penalty under section 15-A (1)(l) of the Act was levied by the assessing authority on the ground that the applicant had issued false certificate i.e. Form-3-A while making the purchases of kapas in as much as on the sale of Binola tax could not be collected under the Act. First appeal filed by the dealer was rejected. Tribunal allowed the second appeal and set aside the penalty. Being aggrieved by the order of Tribunal, Commissioner of Trade Tax filed the present revision.
Heard learned counsel for the parties and perused the order of Tribunal.
Tribunal has deleted the penalty on the ground that in view of explanation of section 3-AAAA both raw cotton and ginned cotton after ginning are deemed to be in the same form and condition, in as much as dealer sold cotton inside the State of U.P. and paid the tax, it can not be said that declaration form was wrongly issued. Tribunal further observed that the Binola was by-product obtained in the process of ginning. Thus the provisions of section 15-A (1)(l) of the Act is not attracted.
After hearing learned counsel for the parties, I do not find any infirmity in the order of Tribunal. Explanation of section 3-AAAA of the Act reads as follows:
For the purpose of this section and of section 3-AAA the sale of--
(i) ginned cotton after ginning raw cotton purchased as aforesaid; or
shall be deemed to be in the same form and condition."
Section 15-A (1)(l) of the Act reads as follows:
"issues or furnishes a false certificate or declaration by reason of which a tax on sale or purchase ceases to be leviable under this Act or the Rules made thereunder; or"
Ginned cotton and raw cotton has been treated as in the same form and condition and therefore, if the sale of cotton was affected within the State of U.P. and the tax was paid, it was deemed to be sale of raw cotton purchased against Form-3-A in the same form and condition. Therefore, it can not be said that the dealer had furnished false certificate or declaration. Section 15-A (1)(l) of the Act is not applicable to by-product. It is concerned with the sale of the product which is purchased against the declaration form. As stated above, applicant had purchased raw cotton against Form-3-A and sold ginned cotton within the State of U.P. in the same form and condition in view of explanation to section 3-AAAA. Thus, it can not be said that the declaration issued was false.
Form 3-A is a certificate in respect of goods liable to tax at the point of sale to consumers to be given by the registered dealer purchasing the goods for sale in the same condition. The certificate is contained n Paragraph 2 of the form which says "I further certify that our said firm has purchased for sale in the same condition.......(description of goods) against Bill/Cash memo No........dated......from M/s..........". The effect of issuing Form III-A to the selling dealer was that the selling dealer was not liable to sales tax for the sales made to the purchasing dealer who issued Form III-A. The effect of issuing Form III-A to the selling dealer was that the selling dealer was not liable to sales tax for the sales made to the purchasing dealer who issued Form III-A. Cotton is taxable at the point of sale to a consumer and in case no Form III-A had been issued, the purchases made by the opposite party would have been deemed to be sales to a consumer and the seller would have been liable to pay Trade Tax on those sales.
Form III-A referred above do not show any declaration of any goods would be sold within the State of U.P. or in the course of Inter-state trade. Declaration was to sell the purchased goods in the same condition and in the present case raw cotton purchased against Form III-A were sold as a ginned cotton, which was deemed to be in the same form and condition under the explanation of section 3-AAAA of the Act. Binola dispatched outside the State of U.P. for sale on consignment basis was not the goods purchased and in as much as by such despatch the statement given in Form III-A can not be false. Therefore, it can not be said that the assessee had made any false statement and had a intention to issue false certificate or declaration.
It is further stated that for invoking the provision of section 15-A(1)(l) of the Act it is necessary to make out a case that while issuing the certificate or declaration dealer was aware that it was false. In the present case, no such case has been made out by the assessing authority and therefore, Tribunal has rightly deleted the penalty under section 15-A (1)(l) of the Act.
In the result, revision lacks merit and is accordingly, dismissed.
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