Form 40 is not conclusive proof of tax payment for sales tax set-off; actual payment by the original dealer must also be shown.

For set-off under Rule 44 of the Gujarat Sales Tax Rules, production of Form 40 signed by the selling dealer is not conclusive proof that tax was actually paid. The assessee must satisfy the Commissioner that the relevant tax on the same goods was paid or became payable on an earlier transaction and must also produce Form 40. Because Form 40 only records that tax has been paid or will be paid within the prescribed time, the assessee remains required to show actual payment by the original dealer before set-off can be granted. The matter was remanded for fresh consideration on that basis.

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Issues: Whether, for claiming set-off under Rule 44 of the Gujarat Sales Tax Rules, 1970, production of Form 40 signed by the dealer is conclusive proof of payment of tax, and whether the assessee must also prove actual payment of tax by the original dealer.

Analysis: Under the proviso to Rule 44, the assessee must satisfy the Commissioner that the relevant tax on the same goods has been paid or has become payable on an earlier transaction and must also produce a certificate in Form 40 issued by the selling dealer. Form 40 itself records that the tax has been paid or will be paid within the prescribed time. Therefore, production of Form 40 by itself does not conclusively establish actual payment of tax. The burden remains on the assessee to produce material showing that the dealer has actually paid the tax, and only on satisfaction of both requirements can set-off be granted.

Conclusion: Form 40 is not conclusive proof of payment of tax. The assessee must prove actual payment by the original dealer and produce Form 40. The matter was remanded for fresh consideration on that basis, and the appeal was partly allowed.

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