Concessional sales tax declaration protects selling dealer; purchaser's later misuse cannot justify denial of the lower rate.

Once the selling dealer furnishes the prescribed declaration form for concessional tax under section 5(3) of the Kerala General Sales Tax Act, his statutory obligation is exhausted. The dealer is not responsible for the purchaser's later failure to use the goods for the declared manufacturing purpose, because the scheme of the Act and rule 28 place the burden of misuse on the purchasing dealer. The seller cannot be denied the concessional rate or subjected to reassessment merely on account of the purchaser's subsequent misapplication of the goods.

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Issues: Whether a selling dealer, who has obtained and furnished the prescribed declaration form for concessional taxation under section 5(3), remains liable to pay the normal rate of tax if the purchasing dealer later fails to use the goods for the declared manufacturing purpose.

Analysis: Section 5(3) of the Kerala General Sales Tax Act, 1963 grants the concessional rate where the seller furnishes the prescribed declaration. The scheme of the provision and rule 28 of the Kerala General Sales Tax Rules shows that the seller's duty is limited to obtaining and producing the declaration in the prescribed form. The seller has no control over the purchaser's later use of the goods, and the penal consequences for misuse are expressly directed against the purchasing dealer under section 46(2)(d). By analogy to the principle stated in relation to sections 8(1) and 8(3)(b) of the Central Sales Tax Act, 1956, the seller cannot be burdened with the purchaser's subsequent misapplication of the goods.

Conclusion: The selling dealer is not liable to be denied the concessional rate merely because the purchasing dealer did not actually use the goods as declared, and the reassessment based on that ground was unjustified.

Ratio Decidendi: Once the selling dealer furnishes the prescribed declaration in accordance with the statute, his obligation is exhausted and the purchaser's later misuse of the goods cannot be visited upon the seller by denying the concessional rate.

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