High Court of Judicature at Allahabad
Case Law Search
M/S Shukla Iron And Steel Co. v. Commissioner Trade Tax U.P.At Lucknow - SALES/TRADE TAX REVISION No. 309 of 1995  RD-AH 870 (22 September 2004)
Court no. 55
Trade Tax Revision no. 309 of 1995.
Trade Tax Revision no. 314 of 1995.
M/S Shukla Iron and Steel Company, Kanpur. ... Revisionist.
The Commissioner of Trade Tax, U. P. Lucknow ... Respondent.
Hon'ble Rajes Kumar, J.
The present revision under Section 11 of U. P. Trade Tax Act (hereinafter referred to as ''Act') is directed against the order of Tribunal dated 21.2.1995 relating to assessment years 1976-77 and 1977-78 respectively.
In the assessment years 1976-77 dealer had produced certain Forms 3-A in respect of their sales and claimed exemption. Assessing Authority granted exemption on the basis of said Forms 3-A. Assessing Authority subsequently received information that some of the parties were found not registered and those Forms have not been issued by the Department and in some of the cases, not issued by the respective offices. A proceeding under Section 21 was initiated and exemptions on such turnover have been withdrawn. Likewise for the assessment year 1977-78 in the original assessment proceedings, applicant filed certain Forms 3-A in respect of sales and claimed exemption thereon. Assessing Authority in some of the cases found that the parties were not registered and Forms were not issued to them by the respective offices. Assessing Authority on the aforesaid ground, disallowed the claim of exemption and levied the tax. First appeals filed by the applicant have been rejected. Dealer filed second appeals before the Tribunal they were also rejected.
Heard Counsel for the parties.
Learned Counsel for the applicant submitted that except in those cases where the allegation is that the Forms were not issued by the Department and in other cases, where the only allegation is that the Firms were not found registered and the Forms were not issued to them by the respective offices, the claim of exemption can not be disallowed. In these cases, no finding had been recorded that the Forms were not genuine and they have not been printed forms of the office. He further submitted that the Department had not made enquiry about a those Firms which were not found registered and about the genuineness of the forms and therefore, rejection of claim against those forms were unjustified. In support of his contention, he relied upon the case of M/S Bharat Iron Stores Vs. Commissioner of Sales Tax reported in 1994 UPTC page 130 which has been followed in the case reported in 2003 UPTC page 925 and in the case of M/S Star Paper Mills Ltd., Saharanpur Vs. Commissioner of Sales Tax reported in 2004 UPTC page 317 . Learned Standing submitted that since the Firms were found to be unregistered and it was also found that the Forms were not issued to such parties by the office, exemption should not be allowed to the dealer, inasmuch as, it was the duty of dealer to explain whereabouts of dealer and to explain that these forms were properly issued to the parties by the Department.
I have perused the order of Tribunal and the authorities below.
For the assessment year 1976-77 in respect of sales to M/S Awasthi Iron Store, Railway Road, Hardoi, there is a specific allegation that the Firm was not registered and the Forms were not issued by the Department at all. In view of this finding, the Forms can not said to be genuine and no exemption can be allowed. With regard to one sales to M/S Rajendra Steel Company, Aligarh, it appears that the Forms 3-A issued to Sri Hari Shankar and Sons, Aligarh was filed and not of the party to whom the sale was made, therefore, exemption against such Form has been rightly disallowed. But in respect of other Forms where the sales have been made to the parties and allegation is that the Firms were found unregistered and the Forms were not issued to such parties from the respective office. In my opinion, exemption can not be disallowed. In respect of such Forms, it was not the case of the Department that the Forms were not at all issued from the Department and they were non genuine and no case had been made out that the Forms have been obtained with the collusion of the parties. Further the Department had also not made any enquiry to find out the whereabouts of those parties and also not made any efforts to find out whether these Forms were not genuine.
For the assessment year 1977-78 the exemption had been disallowed only on the ground that the parties were found not registered with the respective offices and such Forms 3-A were not issued by their office. No case has been made out that these Forms were not genuine and have never been issued or printed by the Department or these Forms have been obtained with the collusion. In this year, no efforts were made by the Department to make any enquiry about the whereabouts of Firms which were not found registered. In this view of the matter, rejection of claim of exemption against the Forms 3-A is not justified. In the case of M/S Bharat Iron Stores Vs. Commissioner of Sales Tax (supra), this Court held as follows:-
"6- Form 3-A is issued in terms of Rule 12-A of the U. P. Sales Tax Rules. Sub rule (3) provides that a registered dealers, who wishes to obtain blank forms, shall apply to the Sales Tax Officer within whose jurisdiction his principal place of business is situate. A perusal of the prescribed Form 3-A shows that it has to contain (i) signature of issuing officer; (ii) seal of the issuing office; (iii) date of issue; (iv) name and address of the dealer to whom issued; (v) number of registration certificate; (vi) date from which it is effective. All these details have to be filed in by the officer who issued Form 3-A to a registered dealer. That registered dealer then gives such forms to the selling dealer after filling in further details. There is no provision in the Act on the lines of Section 3-B which makes a selling dealer liable for the tax, if it is ultimately found that the Forms 3-A accepted by him are not genuine or have been misused. The liability of the selling dealer, who accepts Form 3-A is only to check them to ensure that there is no defect on them which can be reasonably detected by an intelligent person. It is not his duty to ensure by all possible means that the Firm is genuine or is not being misused. A dealer can not be expected to consult a document expert or to send the certificate to the Sales Tax Officer, who issued the same, for verification before accepting the same. Any such things would make in the Act placing specifically or by necessary implication, such a burden on the selling dealer indicates that the legislature had no intention to do so."
"7- In the present cases the finding of the authorities below merely is that the dealers who purchased the goods from the revisionist are not registered in the offices from where the forms in question were issued and that those forms were not issued to them. There is no mention in the orders of the authorities below to whom the respective forms were issued and what those parties to whom those forms were actually issued, had to say about their use. There is also nothing in the orders of the authorities below to indicate that the parties, whose names and addresses have been mentioned in the Tribunal's order, were non-existent and any attempt was made to contact them. There is also nothing in the orders of the authorities below to indicate that there was anything apparent in those forms, which showed that they were not genuine and were manipulated or interpolated. In other words, there is no finding by the authorities below that in accepting the forms in question there was any negligence on the part of the revisionist or that it did not act bonafide. In the absence of such a finding a dealer cannot be denied the benefit of the forms in question because he has not charged sales tax from the parties concerned."
The aforesaid decision has been followed in the case of CST Vs. M/S Indian Turpentine and Resin Co., reported in UPTC 2003 page 925 and M/S Star Paper Mills Ltd., Saharanpur Vs. Commissioner of Sales Tax reported in 2004 UPTC page 317.
For the reasons stated above, revision for the assessment year 1976-77 is allowed in part and the revision for the assessment year 1977-78 is allowed. Tribunal is directed to pass appropriate order under Section 11 (8) of the Act.
Double Click on any word for its dictionary meaning or to get reference material on it.