Concessional tax on paints upheld where prescribed declaration for electricity distribution use was duly furnished.

Paints covered by an exemption notification qualified for concessional tax when sold by a registered dealer to the M.P. Electricity Board against the prescribed declaration stating that the goods were purchased for use in the distribution of electrical energy for sale. As the declaration furnished was in the required form and there was no finding that it was false or that any collusion existed between the dealer and the Board, the statutory condition for partial exemption was satisfied. The sale was therefore entitled to the concessional rate of tax, and the reference was answered in favour of the assessee against the department.

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Issues: Whether the sale of paints to the M.P. Electricity Board was eligible for the concessional rate of tax under the relevant exemption notification when the prescribed declarations had been furnished.

Analysis: The notification granted partial exemption to the class of goods covered by it, subject to the condition that the goods be sold by a registered dealer to the M.P. Electricity Board or another qualifying electrical undertaking against a declaration in the prescribed form that the goods were purchased for use in the distribution of electrical energy for sale. Paints were covered by the notification. The declaration furnished by the Electricity Board stated that the goods were purchased for use in the distribution of electrical energy for sale, and there was no finding that the declaration was false or that there was any collusion between the assessee and the Electricity Board.

Conclusion: The sale was entitled to the concessional rate of tax, and the question referred was answered in the affirmative against the department.

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