of Sales Tax A Vs. Prabhudayal Prem Narain  INSC 186 (26 July 1988)
Sabyasachi (J) Mukharji, Sabyasachi (J) Rangnathan, S.
1988 AIR 1775 1988 SCR Supl. (1) 583 1988 SCC Supl. 729 JT 1988 (3) 542 1988
Sales Tax Act 1948/U.P. Sales Tax Rules, 1948.
3D(7)(b)/Rule 12B & Notification No. ST-111-2712- Exemption from tax-Dealer
entitled to claim only when declaration forms furnished.
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.
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.
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).
the Appeal, ^
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
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 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].
Jute Mfg. Co. Ltd. v. Commercial Tax Officer
Ram Tansukh Ram Tansukh Rai & Co. Budaun v. Commissioner of Sales Tax, U.
P.,  UPTC 1960, approved.
Banne Khan v. CST., 1982 UPTC 665, over- ruled. & CIVIL APPELLATE JURISDICTION:
Civil Appeal No. 2506(NT) of 1988.
the Judgment and order dated 18-8- 1982 of the Allahabad High Court in S.T.R.
No. 89 of 1982.
R.S. Rana and A.K. Srivastava for the Petitioner.
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
leave is granted and the appeal is disposed of by the judgment herein.
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.
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,
 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).
was, however, an earlier decision to the contrary in the case of Commissioner
of Sales Tax v. Kailash Trading Co.,  UPTC 82 1 of the same Court which
has been referred to in this case.
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:
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., ,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
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.
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.