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Commissioner Of Sales Tax vs Kanpur Engineering Stores

High Court Of Judicature at Allahabad|30 January, 1976


1. The Judge (Revisions), Sales Tax, Lucknow, has referred under Section 11(3) the following question for our opinion :
Whether, on the facts and in the circumstances of the instant case, the Judge (Revisions) was justified in law in partly accepting and partly rejecting form C No. C/I-901122?
2. The question arises out of assessment proceedings for the year 1962-63. The assessee declared a turnover of Rs. 53,708. Benefit to reduced rate of tax under Section 8(1) of the Central Sales Tax Act was claimed on a turnover of Rs. 45,527.24. The assessee filed a number of forms in respect of the transaction of sale. One such form related to three bills of the following amounts : Rs. 1,694.00, Rs. 3,210.00, Rs. 752.50.
3. The Sales Tax Officer held that inasmuch as this particular form was in respect of more than one transaction and of the value of more than Rs. 5,000, benefit of the reduced rate of tax could not be given to the assessee on the basis of this form in respect of the transactions shown therein. The assessee preferred an appeal before the Assistant Commissioner. The Assistant Commissioner took the view that inasmuch as the two transactions were less than Rs. 5,000, relief in respect of these could be given. Relief in respect of the third transaction was, however, disallowed. The Commissioner, Sales Tax, preferred a revision against this decision. The Judge (Revisions) upheld the order of the Assistant Commissioner, Sales Tax.
4. The standing counsel contended that in view of the proviso to Rule 8(1-C) of the Central Sales Tax Rules, a single certificate could not cover more than one transaction, where the total amount exceeded Rs. 5,000 and as the certificate in question was in respect of three transactions and exceeded Rs. 5,000 the claim should have been rejected in toto.
5. The proviso to Rule 8(1-C) reads as under :
Provided that no single declaration shall cover more than one transaction of sale, except in cases where the total amount covered by one declaration is equal to or less than Rs. 5,000 or such other amount as the Commissioner may, by a general order, notify in the official Gazette.
6. In the present case, the declaration in form C covered three transactions totalling more than Rs. 5,000. The result was that the assessee could not claim benefit of the declaration for all the three transactions shown in form C. But from that it does not follow that no benefit at all could be had by the assessee in respect of the two transactions shown in the declaration which were less than Rs. 5,000. Rule 8(1-C) or its proviso does not postulate the rejection of the declaration in its totality where more than one transaction is comprised in a declaration and exceeds Rs. 5,000. These rules have been framed in order to give effect to the provision of Section 8(1) and (4) of the Central Sales Tax Act, which have been enacted for the benefit of a registered dealer who sells goods to another such dealer and should, therefore, be construed in such a manner as to give relief to the assessee. Since two of the transactions were of the total value of less than Rs. 5,000, the declaration in form C was valid in respect of these transactions, and the assessee could claim benefit of the declaration in respect of these transactions.
7. The view taken by the Judge (Revisions) appears to be correct.
8. We, accordingly, answer the question referred in the affirmative, in favour of the assessee, and against the department. As none has appeared on behalf of the assessee, there will be no order as to costs.
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Commissioner Of Sales Tax vs Kanpur Engineering Stores


High Court Of Judicature at Allahabad

30 January, 1976
  • C Singh
  • R Sahai