Concessional sales tax under the Tamil Nadu Act prevails over tender conditions where statutory dealer status is deemed for Government departments.

The article explains that a registered dealer purchasing raw materials from the Forest Department for manufacture of soap and talcum powder could claim concessional sales tax under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959, where the finished goods fell within the First Schedule. It states that the Act deems the State Government and its departments to be dealers, and section 22(1) treats the Government as a registered dealer for tax collection purposes, so the Forest Department could not deny Form XVII on the ground that it was not a registered dealer. It further notes that a tender condition requiring payment at the prevailing rate could not override the statutory concession, and excess tax collected was refundable.

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Issues: Whether the petitioner was entitled to concessional sales tax at 3% under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959, whether the Forest Department could refuse Form XVII on the ground that it was not a registered dealer, and whether the excess tax collected under the tender condition was refundable.

Analysis: The petitioner was a registered dealer manufacturing soap and talcum powder within the State, and the goods purchased from the Forest Department were used as raw materials in that manufacture. The final products fell under entries in the First Schedule, so the statutory conditions for concessional taxation were satisfied. The Act treated the State Government and its departments as dealers by a deeming provision, and section 22(1) also treated the Government as a registered dealer for the purpose of collection of tax. Therefore, the Forest Department could not avoid the statutory scheme by asserting that it was not a registered dealer. The tender condition requiring payment of sales tax at the rate in force had to yield to the provisions of the taxing statute, and the refusal to accept Form XVII was unsustainable.

Conclusion: The petitioner was entitled to the concessional rate of 3% and to refund of the excess tax collected.

Final Conclusion: The writ petition succeeded, and the respondents were directed to process the Form XVII declarations and refund the tax collected in excess of the statutory rate.

Ratio Decidendi: When a taxing statute deems the State Government or its department to be a dealer or registered dealer, contractual tender conditions cannot override the statutory entitlement to concessional tax and the corresponding refund remedy.

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