Deduction verification for declared goods: certificate requirement held directory, with alternative evidence allowed to prove entitlement.

Rule 27-A(ii) of the Punjab General Sales Tax Rules, 1949, requiring a Form S.T. XXX certificate to support a deduction claim for declared goods, was treated as a procedural verification device rather than a substantive bar to the statutory deduction. The court read the rule harmoniously with section 5(3) of the Punjab General Sales Tax (Haryana Amendment and Validation) Act, 1967, and held that substantial compliance was sufficient. If the selling dealer did not issue the certificate, the assessing authority could examine other evidence to verify the genuineness of the claim. The rule was therefore upheld as directory and not ultra vires.

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Issues: Whether rule 27-A(ii) of the Punjab General Sales Tax Rules, 1949, requiring a certificate in Form S.T. XXX to accompany a claim for deduction in respect of declared goods, was mandatory or merely directory, and whether it was inconsistent with section 5(3) of the Punjab General Sales Tax (Haryana Amendment and Validation) Act, 1967.

Analysis: Section 5(3) fixed the taxable stage for declared goods, but the impugned rule was framed as an administrative safeguard to ensure correct proof of entitlement to deduction and to prevent tax evasion. The requirement of a certificate from the selling dealer was treated as a procedural method of verification rather than as a substantive condition defeating the statutory deduction. Even where the selling dealer refused to issue the certificate, the assessing authority could examine other available evidence and satisfy itself about the genuineness of the claim. The rule therefore had to be read harmoniously with the Act and understood as requiring substantial compliance.

Conclusion: Rule 27-A(ii) was held to be directory and not ultra vires. The assessing authority could rely on other evidence where the certificate was unavailable, and the writ petition challenging the rule failed.

Final Conclusion: The challenged rule was upheld as a valid procedural requirement for proving the deduction claim, and the petition was dismissed.

Ratio Decidendi: A procedural rule designed to verify entitlement to a statutory tax deduction will be construed as directory, not mandatory, where it can be harmonised with the parent statute and where substantial compliance and alternative evidence can satisfy the assessing authority.

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