Sales tax exemption on inter-dealer purchases without prescribed form stayed unresolved pending larger Bench consideration.

A conflict arose on whether an assessee could claim exemption from sales tax on purchases from dealers who had already paid tax without producing Form III-C(2) under the U.P. Sales Tax Rules. One line of authority treated the prescribed form as a mandatory condition for exemption, while another accepted other documentary evidence from the selling dealers as sufficient. The controversy was not finally decided in the revision and was considered important enough to be placed before the Chief Justice for constitution of a larger Bench.

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Issues: Whether the assessee could claim exemption from payment of sales tax on purchases made from dealers who had themselves paid sales tax, without producing Form III-C(2) prescribed under the U.P. Sales Tax Rules.

Analysis: The revision raised a conflict between two earlier single-judge views on Section 3-D(7) of the U.P. Sales Tax Act. One view required production of the prescribed form as a condition for exemption, while the other treated other documentary evidence from the selling dealers as sufficient even in the absence of the prescribed form. As the controversy was considered important, it was not finally resolved in the revision and was directed to be placed before the Chief Justice for constitution of a larger Bench.

Outcome: The matter was referred for decision by a larger Bench.

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