Concessional tax rate for component parts upheld where the buyer's prescribed declaration satisfied the statutory conditions.

Section 3(3) grants a concessional rate of tax when goods are sold to another dealer for use as component parts of goods in the First Schedule to be manufactured and sold within the State. Production of the buyer's prescribed form XVII declaration satisfied the statutory requirement for the selling dealer, and no further proof of collateral facts was necessary once the declaration was filed. The authority could not deny the concession merely by characterising the motors as accessories, because the valid declaration controlled the entitlement where the other statutory conditions were met. The seller was therefore entitled to the concessional rate of tax.

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Issues: Whether the seller was entitled to the concessional rate of tax under section 3(3) on production of the buyer's form XVII declaration, and whether the assessing authority could deny the concession by treating the goods as accessories rather than component parts.

Analysis: Section 3(3) grants a concessional rate where the statutory conditions are satisfied, including sale of goods to another dealer for use as component parts of goods mentioned in the First Schedule to be manufactured and sold inside the State. The prescribed declaration filed by the buyer satisfied the statutory requirement for the seller. Once the declaration in the prescribed form was produced, no further proof of collateral circumstances was necessary. The authority's view that the motors were only accessories did not displace the effect of the valid declaration, particularly when the goods formed part of the manufactured product.

Conclusion: The seller was entitled to the concessional rate of tax, and the denial of that concession was unsustainable.

Ratio Decidendi: Where the buyer furnishes the declaration required by section 3(3) in the prescribed form, the selling dealer is entitled to the concessional rate if the other statutory conditions are met, and no additional proof beyond the declaration is required.

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