1992 (6) TMI 168 - AT - VAT and Sales Tax

Tribunal: Unregistered dealers not bound by form XXXIII requirement for sales tax exemption.

The Tribunal held that the requirement to produce a declaration in form XXXIII under rule 27C(2) of the Bengal Sales Tax Rules, 1941, was not mandatory ... - Issues Involved:1. Mandatory nature of the requirement to produce a declaration in form XXXIII under rule 27C(2) of the Bengal Sales Tax Rules, 1941.2. Applicability of rule 27C(2) to claims under section 5(3) of the Central Sales Tax Act, 1956.3. Validity of rule 27C(2) when the purchasing dealer is not registered in West Bengal.4. Whether other evidence can be used to establish a sale in the course of export under section 5(3) of the Central Sales Tax Act, 1956.Detailed Analysis:1. Mandatory Nature of Form XXXIII Requirement:The Tribunal examined whether the production of a declaration in form XXXIII under rule 27C(2) was mandatory for claiming exemption under section 5(3) of the Central Sales Tax Act, 1956. The language of rule 27C(2) was found to be mandatory, stating that the dealer 'shall, on demand, furnish a declaration in form XXXIII.' However, the Tribunal noted that the purchasing dealer from Kerala was not a registered dealer in West Bengal and hence could not obtain form XXXIII. The Tribunal concluded that rule 27C(2) does not apply to unregistered dealers and that it is not mandatory in such cases. It emphasized that no law requires performing an impossible task.2. Applicability of Rule 27C(2) to Section 5(3) Claims:The Tribunal discussed the applicant's contention that rule 27C(2) was not framed under the Central Sales Tax Act, 1956, and thus should not apply to claims under section 5(3) of the Act. The Tribunal noted that rule 27C(2) aims to lay down a mode of proof for the exemption available under section 5(2)(a)(v) of the 1941 Act, reflecting the constitutional requirement under article 286(1)(b). However, in this case, the rule was deemed inapplicable as it did not account for unregistered purchasing dealers.3. Validity of Rule 27C(2) for Unregistered Dealers:The Tribunal found that rule 27C(2) does not contemplate situations where the purchasing dealer is not registered in West Bengal. The rule was thus not applicable to the applicant's case. The Tribunal held that the Legislature and rule-making authority should provide appropriate mechanisms for implementing constitutional provisions and statutory requirements. Since no specific rule governed the proof of sales to unregistered dealers in the course of export, the authorities could not insist on form XXXIII for exemption.4. Use of Other Evidence for Section 5(3) Claims:The Tribunal concluded that even if form XXXIII was not produced, the exemption could be granted based on other evidence. The Tribunal emphasized that the assessing officer could derive satisfaction from other evidence produced by the dealer to prove that the sale was in the course of export. The Tribunal referred to the case of State of Orissa v. M.A. Tulloch and Co. Ltd., supporting the contention that production of form XXXIII should be optional and that other evidence could suffice.Conclusion:The writ petition was allowed, and the assessment order dated December 16, 1982, the appellate order dated July 22, 1984, and the revisional order dated October 22, 1986, were set aside concerning the assessment of sales tax on the sale of 55,000 sets of tea-chests. The Commercial Tax Officer was directed to make a fresh assessment within three months, allowing the applicant to produce evidence to establish that the sale was in the course of export and entitled to exemption. The authorities were instructed not to insist on form XXXIII for the impugned sale.Separate Judgment by P.C. Banerji:P.C. Banerji agreed with the conclusion but provided a different reasoning. He emphasized that the statutory provision in section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941, allowed deductions based on the satisfaction of the Commissioner, without necessarily requiring form XXXIII. He argued that rules should facilitate, not inhibit, statutory provisions and that the Commercial Tax Officer could allow deductions based on other relevant evidence. He concluded that the rule demanding form XXXIII should be interpreted as directory, not mandatory, especially when fulfilling it was impossible.