Commission-agent sales and interstate despatch accepted, but interest upheld on unpaid purchase tax despite claimed bona fide exemption belief.

Turnover was held non-taxable where the Tribunal found, on evidence, that the dealer acted as a commission agent and despatched goods to traders outside Uttar Pradesh; that factual finding was not shown to be perverse, so revisional interference was declined. Interest under Section 8(1) of the U.P. Sales Tax Act was nevertheless held leviable on unpaid purchase tax because the exemption certificate covered only sales of manufactured goods, while exemption from purchase tax on raw materials depended on a separate recognition certificate under Section 4-B, which the dealer did not hold. A claim of bona fide belief failed where the statutory position was clear and unsupported by due care.

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Issues: (i) Whether the Tribunal was justified in accepting the dealer's claim that the goods were sold through it as a commission agent and despatched outside Uttar Pradesh, so that the turnover was not taxable in the State; (ii) Whether interest under Section 8(1) of the U.P. Sales Tax Act was leviable on unpaid purchase tax where the dealer claimed a bona fide belief that raw materials used for manufactured exempt goods were also exempt.

Issue (i): Whether the Tribunal was justified in accepting the dealer's claim that the goods were sold through it as a commission agent and despatched outside Uttar Pradesh, so that the turnover was not taxable in the State.

Analysis: The Tribunal's acceptance of the dealer's case turned on its factual finding that the dealer acted as a commission agent and consigned the goods to outside-State traders for sale on commission basis. That finding was based on the evidence and was not shown to be perverse or illegal. The matter did not involve the application of any different legal principle on the facts found, and the revisional court would not interfere with such a concluded finding of fact.

Conclusion: The finding in favour of the dealer on the first two questions was upheld and interference was declined.

Issue (ii): Whether interest under Section 8(1) of the U.P. Sales Tax Act was leviable on unpaid purchase tax where the dealer claimed a bona fide belief that raw materials used for manufactured exempt goods were also exempt.

Analysis: Interest under Section 8(1) depends on non-payment of tax admittedly payable within the prescribed time. The exemption granted by an eligibility certificate under Section 4-A related to sales of manufactured goods, whereas exemption from purchase tax on raw materials was governed by the separate statutory scheme under Section 4-B and was available only to a dealer holding a recognition certificate. As the dealer had no recognition certificate and the statutory position was clear, the claim that the purchases were exempt could not be treated as bona fide. A mere application for opinion to the Commissioner did not cure the absence of due care and caution.

Conclusion: Interest under Section 8(1) was held leviable and the dealer's plea of bona fide belief was rejected.

Final Conclusion: The revision succeeded only on the question of interest, while the Tribunal's factual acceptance of the dealer's commission-agency and outside-State despatch case remained undisturbed.

Ratio Decidendi: Interest for non-payment of tax admittedly payable is avoidable only where the assessee's claim of exemption is genuinely bona fide and supported by a plausible statutory basis; a claim contrary to a clear exemption scheme does not prevent levy of interest.

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