ST-I declaration form bars sales tax on inter-dealer sale once the prescribed declaration is furnished

A registered dealer purchasing goods from another registered dealer under the Delhi Sales Tax Act, 1975 was not liable to have sales tax charged where a valid ST-I declaration form was furnished. The statutory scheme excludes such sales from the seller's taxable turnover, and the second proviso to the turnover provision makes the prescribed declaration the condition for deduction. Once the ST-I form is supplied, the selling dealer cannot lawfully recover sales tax from the purchaser, and any attempt to do so would be contrary to the Act and attract the statutory consequence for unlawful collection of tax.

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Issues: Whether sales tax could be charged on the sale of goods to a registered dealer who furnished a valid ST-I form under the Delhi Sales Tax Act, 1975.

Analysis: The statutory scheme permits a registered dealer to purchase goods without sales tax where the purchasing dealer furnishes the prescribed declaration in the prescribed form. The relevant provisions show that a sale by one registered dealer to another registered dealer is excluded from the seller's taxable turnover, and the second proviso to the relevant turnover provision requires the declaration in form ST-I for the deduction to be available. Once the ST-I form is furnished, the selling dealer cannot lawfully recover sales tax from the purchasing registered dealer. Any insistence on charging tax in such a transaction would be contrary to the Act and would expose the collecting party to the penal consequence provided for unlawful collection of tax.

Conclusion: Sales tax was not chargeable on the transaction, and the respondent could not insist on its payment once a valid ST-I form was supplied.

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