Substantial compliance in sales tax declarations protects exemption where purchaser registration was valid when sales occurred.

Production of declaration forms by a selling dealer constitutes substantial compliance with the statutory requirement and initially discharges the seller's burden under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941. Once the seller shows that the purchaser was a registered dealer and that the goods were of the specified class, the burden shifts to the Commercial Tax Officer to rebut genuineness. Subsequent cancellation of the purchaser's registration certificates does not retrospectively invalidate declaration forms for prior sales. Omission to strike out alternative purposes in the declaration form, or the fact of partly cash and partly cheque payment, is not fatal absent a finding that the transactions were not bona fide; the exemption therefore could not be denied.

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Issues: Whether exemption under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 could be denied merely because the purchasing dealers' registration certificates were cancelled subsequently and the declaration forms did not strike out alternative purposes or mention challan details.

Analysis: Production of declaration forms by a selling dealer substantially complies with the statutory requirement and discharges the initial onus. The seller is required to satisfy himself that the purchaser was a registered dealer and that the goods purchased were of the specified class; once that is shown, the burden shifts to the Commercial Tax Officer to rebut the presumption of genuineness. Subsequent cancellation of the purchasing dealers' registration certificates does not operate retrospectively to invalidate declaration forms relating to prior sales. Omission to strike out alternative purposes in the declaration form, by itself, is not fatal where the transaction otherwise shows substantial compliance. Mere suspicion, or the fact that payment was partly by cash and partly by cheque, is not enough to dislodge the claim in the absence of a firm finding that the transactions were not bona fide.

Conclusion: Exemption could not be refused on the facts found, and the disallowance made by the assessing and appellate authorities was unsustainable.

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