Sales tax deduction rules are directory where substantial compliance suffices, but final findings cannot be reopened later.

Rule 18 of the Bihar Sales Tax Rules, 1949, requiring declarations for sales to registered dealers, was construed as directory rather than mandatory, so deduction could not be defeated solely for non-production of the prescribed form if substantial compliance and other material satisfied the taxing authority. However, the assessee's separate claim for deduction on aggregate credit sales was barred because an earlier finding that no adequate attempt had been made to satisfy the authority by other material had attained finality between the parties. On that basis, the deduction could not be reopened in the same assessment dispute.

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Issues: (i) Whether rule 18 of the Bihar Sales Tax Rules, 1949, requiring production of declarations in support of sales to registered dealers, was mandatory or directory; (ii) whether the assessee's claim for deduction on account of aggregate credit sales to registered dealers was barred by the earlier decision of the Board of Revenue.

Issue (i): Whether rule 18 of the Bihar Sales Tax Rules, 1949, requiring production of declarations in support of sales to registered dealers, was mandatory or directory.

Analysis: The deduction provision in section 5 of the Bihar Sales Tax Act, 1947, read with rule 18, was construed in the light of the Supreme Court's approach that such procedural requirements are to be reconciled with the charging and deduction scheme of the Act. The rule did not create an absolute bar to deduction merely because the prescribed declaration was not produced; substantial compliance and satisfaction of the taxing authority from other material could suffice.

Conclusion: Rule 18 was directory and not mandatory, and the contrary view taken by the taxing authorities was erroneous.

Issue (ii): Whether the assessee's claim for deduction on account of aggregate credit sales to registered dealers was barred by the earlier decision of the Board of Revenue.

Analysis: The earlier order of remand did not finally terminate the proceedings, but the prior finding that no attempt had been made to satisfy the taxing authority by other material had attained finality between the parties. In view of the binding effect of that finding and the absence of any successful challenge to it, the assessee could not reopen the claim for deduction on the same footing in the present proceedings.

Conclusion: The assessee's claim for deduction was barred by the earlier binding finding and could not be allowed in these proceedings.

Final Conclusion: The reference was answered by holding that rule 18 was directory, but the assessee was nevertheless not entitled to the deduction claimed because the earlier conclusive finding operated against him.

Ratio Decidendi: A procedural requirement governing deduction under a sales tax rule is directory where substantial compliance and satisfaction from other material are possible, but a prior finding that has attained finality between the parties cannot be reopened in later proceedings arising from the same assessment dispute.

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