Registered dealer declarations protect sales tax deduction unless the authority proves the declaration is not genuine.

Deduction under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 could not be denied merely because the purchasing registered dealer was later untraceable. The statutory scheme required sales to a registered dealer, coverage of the goods by the purchaser's registration certificate for the permitted purpose, and production of the prescribed declaration in writing. Where the seller produced declarations in proper form, maintained satisfactory accounts, and there was no proof that the declarations were fabricated or otherwise not genuine, the authority could not reject the deduction on suspicion or inability to independently verify the purchaser. The assessment was directed to be revised and the deduction allowed.

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Issues: Whether deduction could be denied under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 merely because the purchasing registered dealer was untraceable and the declarations could not be independently verified.

Analysis: The statutory scheme required only that the sales be made to a registered dealer and that the goods be covered by the purchaser's registration certificate for the permitted purpose. Rule 27A contemplated production of a declaration in writing by the purchasing dealer or an authorised officer, and the seller was not required to ensure the purchaser's later availability or movement. The adverse inference drawn below rested on the purchaser being untraceable and on suppositions about the declarations, but the record did not establish that the declarations were fabricated or that the seller could reasonably have detected any defect. The seller had otherwise maintained satisfactory accounts and had produced declarations in proper form.

Conclusion: Deduction could not be refused on the ground that the purchasing dealer was untraceable. The claim for deduction of the disputed sales was allowed and the assessment was directed to be revised accordingly.

Ratio Decidendi: Where the statutory conditions for sales to a registered dealer are satisfied and the seller produces the prescribed declaration, deduction cannot be denied merely because the purchasing dealer is later untraceable, unless the authority proves that the declaration is not genuine.

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