Resale deduction certificate rule: purchaser's claim stands once prescribed certificate is produced, unless the certificate is invalid.

Production of the prescribed certificate by the purchasing dealer under the amended resale-deduction scheme satisfied the statutory condition for deduction, unless the certificate was shown to be bogus or invalid. Once the assessee produced certificates issued by a registered selling dealer, the initial burden was discharged, and the department had to prove with cogent evidence that the underlying sales were not made in the course of the seller's business. A finding recorded in separate proceedings against the seller, where the purchaser had no notice and was not a party, could not by itself defeat the purchaser's claim. The resale deduction was therefore allowed.

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Issues: Whether the respondent-assessee was entitled to the resale deduction under section 8(ii) of the Bombay Sales Tax Act, 1959 on production of certificates under section 12A, when the department relied only on a finding in the seller's assessment that the underlying sales were casual sales.

Analysis: The assessee produced the prescribed certificates issued by the selling dealer, whose registration was undisputed and in force. Once such certificates were produced, the initial burden stood discharged. The department then had to establish, by cogent evidence, that the sales were not made in the course of the seller's business. A finding recorded in separate proceedings against the seller, in which the assessee was not a party and had no notice, could not by itself be used against the assessee. The later amendment to section 8(ii) and section 12A showed that the legislative scheme attached decisive importance to the prescribed certificate, and there was no warrant to read into the provision an additional requirement that the assessee must independently prove the nature of the seller's business sales.

Conclusion: The respondent-assessee was entitled to the deduction, and the department failed to displace the statutory effect of the certificate or to prove that the resale claim was wrongly allowed.

Final Conclusion: The reference was answered in favour of the assessee, and the disallowance of the resale claim could not be sustained.

Ratio Decidendi: Under the amended resale-deduction scheme, production of the prescribed certificate by a purchasing dealer satisfies the statutory condition for deduction unless the certificate is shown to be bogus or otherwise invalid, and a finding against the selling dealer in proceedings to which the purchaser was not a party cannot by itself defeat the purchaser's claim.

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