Deeming fiction in purchase tax law sustained where prescribed declaration was not filed to rebut first-purchase presumption.

Under section 3-D(7) of the U.P. Sales Tax Act, a purchase in Uttar Pradesh was treated as the first purchase unless the dealer rebutted that deeming fiction by producing the prescribed declaration or certificate from the selling dealer. The assessee did not file Form III-C-1, so the statutory condition for displacing the presumption was not met. The Allahabad HC therefore upheld levy of purchase tax on the assessee, notwithstanding the contention that the Food Corporation of India had already paid purchase tax on the transaction.

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Issues: Whether purchase tax could be levied on the assessee for wheat purchases in the absence of Form III-C-1, despite the contention that the Food Corporation of India had already paid purchase tax.

Analysis: Section 3-D(7) of the U.P. Sales Tax Act, 1948 created a deeming rule that every purchase within Uttar Pradesh would be treated as the first purchase unless the dealer proved otherwise to the satisfaction of the assessing authority by furnishing the prescribed declaration or certificate obtained from the selling dealer. The assessee had admittedly not filed Form III-C-1. In that situation, the statutory condition for rebutting the deeming fiction was not satisfied, and the Revenue was entitled to levy tax on the assessee.

Conclusion: The liability to purchase tax was upheld against the assessee for want of the prescribed form.

Ratio Decidendi: Where the statute deems a purchase to be the first purchase unless the dealer furnishes the prescribed declaration or certificate, non-production of the statutory form justifies levy of purchase tax notwithstanding a claim that tax was paid by another party.

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