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Issues: Whether the petitioner was entitled to purchase the sandalwood at the concessional sales tax rate of 3% on furnishing Form XVII, or whether tax was payable at 12%.
Analysis: The petitioner was a registered dealer and claimed the goods were to be used as raw material for manufacture within the State for sale. Section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 permits a dealer purchasing goods for such manufacturing use to pay tax at only 3% if the prescribed declaration is furnished. Rule 22 of the Tamil Nadu General Sales Tax Rules, 1959 requires the declaration to be in Form XVII and duly obtained, filled in, and furnished in the prescribed manner. On the petitioner furnishing the declaration for use of the goods as raw material, the statutory conditions for the concessional rate stood satisfied.
Conclusion: The petitioner was entitled to the concessional rate of 3% and the respondents were bound to accept the declaration and deliver the goods. Any excess tax collected was liable to be refunded.
Ratio Decidendi: Where the purchasing dealer satisfies the statutory conditions and furnishes the prescribed declaration showing use of the goods for manufacture for sale, the concessional sales tax rate under the special provision must be granted.
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