Presumption of consumer sale under trade tax rules applies when prescribed declaration form and proof of prior taxation are missing.

Under the U.P. Trade Tax Act and Rules, stone grit taxable only at the point of sale to the consumer could be brought to tax on purchase or resale where the dealer failed to furnish the prescribed Form III-A and did not prove that tax had already been paid at an earlier stage. The statutory presumption treated sales as consumer sales unless the dealer rebutted it with proper evidence. On the facts noted, the absence of the declaration form and the recorded issue of invoices charging tax supported liability on both the purchase and the subsequent sales as deemed sales to the consumer.

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Issues: (i) Whether stone grit purchased from a registered dealer without furnishing Form 3-A could be taxed in the hands of the revisionist purchaser. (ii) Whether subsequent sales of such stone grit by the revisionist, in the absence of Form 3-A, were liable to tax as sales to the consumer.

Issue (i): Whether stone grit purchased from a registered dealer without furnishing Form 3-A could be taxed in the hands of the revisionist purchaser.

Analysis: Section 3-AA of the U.P. Trade Tax Act provided that goods of the specified class were taxable only at the point of sale to the consumer, and subsection (2) created a presumption that every sale was to a consumer unless the dealer proved otherwise. Rule 12-A of the U.P. Trade Tax Rules required a registered dealer seeking purchase without payment of tax to furnish Form III-A. On the facts found, the revisionist had not furnished the declaration form and had not adduced evidence to show that the tax had already been paid at the earlier stage.

Conclusion: The purchase of stone grit without furnishing Form 3-A was liable to be taxed in the hands of the revisionist purchaser.

Issue (ii): Whether subsequent sales of such stone grit by the revisionist, in the absence of Form 3-A, were liable to tax as sales to the consumer.

Analysis: The statutory scheme treated a sale to a person other than a registered dealer, without the prescribed declaration, as a deemed sale to the consumer. The earlier liability of another dealer did not bar tax on the revisionist's own sales when the revisionist failed to establish exemption in the manner recognised by the Act and Rules. The factual findings recorded that the revisionist issued invoices charging tax, which supported the conclusion that the sales were made as taxable consumer sales.

Conclusion: The subsequent sales by the revisionist were deemed sales to the consumer and were liable to tax.

Final Conclusion: The tax liability on stone grit was upheld on the basis that, in the absence of Form 3-A and proof of prior taxation, both the purchase and the subsequent sales fell within the consumer-sale levy under the statutory scheme.

Ratio Decidendi: Where goods are taxable only at the point of sale to the consumer, failure to furnish the prescribed declaration and failure to prove prior taxation attract the statutory presumption that the sale is to the consumer and make the dealer liable to tax.

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