Concessional sales tax declaration protects the seller; purchaser non-compliance cannot justify reassessment against the selling dealer.

Production of the prescribed Form XVII declaration entitled the selling dealer to concessional tax under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959. The seller was not required to verify actual end-use or ensure the purchaser's compliance with the declaration conditions, and any false declaration or misuse of goods by the purchaser had to be dealt with against the purchasing dealer. Contravention of Form XVII conditions did not justify higher assessment or penalty on the seller. The reassessment against the selling dealer was therefore without jurisdiction and the challenge succeeded.

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Issues: Whether, under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959, the selling dealer could be denied concessional rate of tax and subjected to higher assessment for alleged non-compliance with Form XVII conditions by the purchasing dealer.

Analysis: The controlling principle applied was that the selling dealer becomes entitled to the concessional rate once the statutory declaration is produced in the prescribed form. The obligation of ensuring actual end-use or compliance with the declaration does not shift to the seller; any false declaration or misuse of the goods by the purchaser attracts consequences against the purchasing dealer, not the selling dealer. The decision also followed the consistent line of authority that contravention of the conditions attached to Form XVII does not authorise tax or penalty to be imposed on the seller under section 3(3).

Conclusion: The impugned reassessment against the selling dealer was without jurisdiction, and the challenge succeeded in favour of the assessee.

Ratio Decidendi: Under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959, production of the prescribed declaration entitles the selling dealer to concessional tax, and any false declaration or subsequent misuse by the purchaser cannot be visited upon the seller.

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