Sales tax deduction cannot be denied for non-filing of forms where production is required only on demand.

Deduction of sales to registered dealers under section 5(2)(a)(ii) could not be disallowed merely because S.T. XXII forms were not filed with the return. Rule 26, as then in force, required the dealer to produce the cash memo, bill, and declaration only when called upon by the Assessing Authority, and the later amendment replacing "on demand" with "along with his return" confirmed that the earlier rule imposed no filing obligation at return stage. As no demand was made, refusal of the deduction was unjustified and the question was answered in favour of the assessee.

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Issues: Whether deduction of sales to registered dealers under section 5(2)(a)(ii) could be disallowed for want of S.T. XXII forms when rule 26, as it then stood, required production only on demand by the Assessing Authority.

Analysis: Rule 26 of the Punjab Sales Tax Rules, 1949, in its unamended form, required the dealer to produce the relevant cash memo or bill and the declaration in form S.T. XXII only when called upon to do so. The subsequent amendment substituting the words "along with his return" for "on demand" showed that the earlier rule did not impose an obligation to file those documents with the return. Since no demand was made by the Assessing Authority, the deduction could not be refused on that ground.

Conclusion: The refusal to allow deduction was unjustified, and the question referred was answered in the negative, in favour of the assessee.

Ratio Decidendi: Where a tax rule requires supporting documents to be produced only on demand, deduction cannot be denied for non-filing of those documents with the return unless such demand is made.

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