Concessional sales-tax declarations: seller not liable for buyer's misuse of Form XVII, and writ relief may lie for jurisdictional error.

Under the concessional sales-tax scheme, a selling dealer is entitled to the concessional rate once the prescribed declaration in Form XVII is obtained in the required manner, and the seller is not responsible for the purchasing dealer's later misuse or false representation. Liability for contravention rests on the purchasing dealer, so the seller cannot be denied the concession or penalised for the buyer's breach. The article also notes that writ jurisdiction may be exercised despite an alternative statutory appeal where the assessment is without jurisdiction, and that Section 10(3) does not apply where the seller has not produced any false document to support an incorrect claim.

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Issues: (i) Whether a selling dealer can be denied concessional rate of tax or saddled with penalty when the purchasing dealer furnishes Form XVII but later contravenes the conditions of the declaration. (ii) Whether the writ petition was maintainable despite the availability of a statutory appeal, and whether Section 10(3) applied to the facts.

Issue (i): Whether a selling dealer can be denied concessional rate of tax or saddled with penalty when the purchasing dealer furnishes Form XVII but later contravenes the conditions of the declaration.

Analysis: Section 3(3) grants concessional tax on sales to a manufacturing dealer upon production of the prescribed declaration. The seller's duty is confined to obtaining the duly filled and signed form from the purchasing dealer in the prescribed manner. The statutory scheme, as consistently interpreted, places liability for misuse or false declaration on the purchasing dealer and not on the selling dealer. Earlier and later decisions on the same provision were followed to hold that the seller is not required to verify the subsequent end-use of the goods by the buyer.

Conclusion: The selling dealer could not be denied the concessional rate or penalised for the purchasing dealer's breach; the liability lay only on the purchasing dealer.

Issue (ii): Whether the writ petition was maintainable despite the availability of a statutory appeal, and whether Section 10(3) applied to the facts.

Analysis: The alternative-remedy rule is only a rule of discretion and does not bar writ jurisdiction where the impugned order is without jurisdiction. Section 10(3), which concerns a dealer knowingly producing a false document to support an incorrect claim, was not attracted because the seller had not produced any false document of that nature. The assessment had been made by fastening liability on the wrong person, contrary to the governing provision and settled precedent.

Conclusion: The writ petition was maintainable and Section 10(3) did not justify the assessment or penalty against the seller.

Final Conclusion: The assessment and penalty against the selling dealer were set aside, and relief was granted to the assessee on the ground that the statutory liability for misuse of Form XVII rested on the purchasing dealer alone.

Ratio Decidendi: Under the concessional sales-tax scheme, once the selling dealer obtains the prescribed declaration in the required form, he is not responsible for the purchasing dealer's subsequent misuse or false representation, and liability for such contravention cannot be shifted to the seller.

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