COMMISSIONER OF SALES TAXversusPRABHUDAYAL PREM NARAIN

                  COMMISSIONER OF SALES TAX                                   A
                              v.
                  PRN3HUDAYAL PREM NARAIN

                               JULy 26, 1988
                                                                              B
   [SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.)

      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.

        The respondent a dealer in. pulses, claimed exemption under           C
  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 Com-
. missioner (Judicial) rejected the assessee's claim for exemption from
 ~.                                                                           D
      On appeal,_ the Tribunal was of the view that since the assessee
 had not furnished Form III-C(l), he was not entitled to any exemption
 under s. 3-D of the Act.

        The High c;::ourt all()wed the revision petition on the ground that   E
 as the Tribunal had not gone into the proof furnished by the assessee
 before the assessing authority and the Assistant Commissioner (Judi-
 cial) in support of his claim for exemption, and remitted the matter
 back to the Tribunal, directing i_t to consider the question whether the
 dealer was entitled to get any exemption on the basis of the evidence
 that he had furnish~.                                                        F

      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.
 30(7-B) of the Act the assessee was not entitled to lead any other evi•
 dence apart from submitting the registered dealer Form No. III-C(2).
                                                                              G
       Allowing the AJ?peai,

       HELD: 1. The High Cour,t \VBS in error in directing the Tribunal
 to consider the ma~er 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]                              ff

                                    583
    584         SUPREME COURT REPORTS               [1988] Supp. 1 S.C.R.

A          2. Under section 3-0(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 taXing authorities. 15860]

B         Kedar Nath Jute Mfg. Co. Ltd. v. Commercial Tax Officer &
    Ors., 16 STC 607, referred to.

        Mis 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.
c                                                        '
         CIVIL APPELLATE JURISDICTION: Civil Appeal No.
    2506(NT) of 1988.

         From the Judgment and Order dated 18-8-1982 of the Allahabad'
D   High Court in S.T.R. No. 89 of 1982.

          S.C. Manchanda, R."S. Rana and A.K. Srivastava for the Peti-
    tioner.

          The Judgment of the Court was delivered by
E
          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
F   judgment herein.

          This appeal arises ftom 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.
G   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-111-2712/X-
H   6(2)-77 U.P. Act XV-48-order-77 and held that the contention of the
       COMMR. OF SALES TAX v. P.P. NARAIN [MUKHARJI, J.J             585

assessee could not be accepted that he had purchased the pulses in
qu~stion before 1st May, 1977. There was no dispute on this conien-         A
ti on raised subsequently; The oniy 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 evi-
dences that had been produced before the assessing authority and the        B
Asstt. Commissioner. The Tribunal was of the view that since the
assessee had not furnished From UI-C(l), 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 30(7-b ), the assessee was entitled to lead evidence to the         C
satisfaction of the assessing authority that the sale was made to a
registered dealer and was not confined only to furnishing Form III-
C(2). There was, however, an earlier decision to the contrary in the
case of Commissioner of Sales Tax v. Kai/ash Trading Co., rt981]
UPTC 821 of the same Court which has been referred to in this case.
                                                                            D
      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 exemptio·n 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         E
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 30(7-b) of the Act, he was not
entitled to lead aily other evidence apart from submitting to the re-       F
gistered dealer Form No. III-C(2). Clause (b) of sub-section (7) of
Section 3-0 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 sub-        G,
           section (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."                   H.
    586        SUPREME COURT REPORTS               11988] Supp. 1 S.C.R.

A         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 Mis. Govind Ram Tansukh Ram Tansukh Rai & Co.
    Budaun v. Commissioner of Sales Tax, U. P., I19851 UPTC 1060.
    There, after considering the aforesaid two decisions of the learned
B
    Single Judges, the Division Bench held that if the asscssce had not
    furnished the required declaration forms in order to be entitled for
    exemption, the assessee could not file any other evidence which re-
    quired to be considered by the taxing authorities.

          In that view of the matter the decision of the Division Bench
C 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
  unu..;r the Bengal Finance Sales Tax Act, held that the dealer could
  claim exemption on the sales to the registered dealer by furnishing the
D dccl~ration form and unless such declaration forms are furnished, the
  dealer was not entitled to any exemption. This Court further reiterated
  I hat the provisions of this nature should be construed as mandatory. In
  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 in
  directing the Tribunal to consider the matter on other evidence. The
E 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
                         of
    aside and the order the Tribunal is restored. There will be no order
    as to costs.
F
    N.V.K.                                                Appeal allowed.