Strict compliance for sales tax exemption on first-point goods required original declarations or the prescribed loss procedure.

Strict compliance was required to obtain exemption or deduction on sales of first-point goods under the Delhi Sales Tax Act and Rules. The statutory scheme contemplated production of the prescribed declaration in Form ST-3, and the exemption from filing the original form was conditional on production of supporting bills or cash memos. Where the original declaration was lost, the dealer had to seek relief under rule 7(3) by applying to the Commissioner with the prescribed material. Photocopies of invoices alone were insufficient, and mere proof that the goods were first-point goods did not establish entitlement to deduction in the manner required by law.

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Issues: Whether the assessee was entitled to exemption from sales tax on first-point goods on the basis of photocopies of purchase invoices and alleged loss of books of account, and whether non-production of the prescribed original declaration form disentitled the assessee from deduction under the Delhi sales tax scheme.

Analysis: The applicable provisions under the Delhi Sales Tax Act, 1975 and the Delhi Sales Tax Rules, 1975 required strict compliance for availing deduction or exemption on sales of first-point goods. The scheme contemplated production of the prescribed declaration in form ST-3, and the notification exempting dealers from filing that declaration expressly made the exemption conditional upon production of bills or cash memos supporting the purchase of goods in Delhi. The Court applied the ratio of the Supreme Court in India Agencies to hold that such statutory conditions are mandatory and must be strictly fulfilled. The rule also contained a specific remedial mechanism where original declarations were lost, namely, an application to the Commissioner under sub-rule (3) of rule 7, supported by the prescribed facts and evidence, so that exemption from producing the original form could be considered. The assessee did not invoke that mechanism and instead sought to rely on photocopies alone. Mere identification of the goods as first-point goods was not enough, because the assessee still had to prove entitlement to deduction in the manner prescribed by the Act, Rules and notification.

Conclusion: The assessee was not entitled to claim exemption or deduction on the basis of photocopies of invoices without complying with the prescribed statutory procedure, and the tax demand was upheld against the assessee.

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