Concessional sales tax on Form IV declarations remains available to the seller despite later misuse by the purchasing dealer.

Sale of size wood against a valid Form IV declaration to a registered dealer qualified for concessional tax at 4% under the Orissa Sales Tax Act because the seller's obligation was limited to acting on the declaration as furnished. The declaration covered manufacture, processing, mining, or power-related use, and did not state use as packing materials. A later change in the purchasing dealer's use of the goods did not deprive the seller of the concession; any differential tax arising from breach of the declared use is recoverable from the purchaser, not the seller.

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Issues: (i) Whether sale of size wood against declaration Form IV to a registered dealer was eligible for concessional rate of tax at 4% under the relevant entry in the Schedule of rates under Section 5(1) of the Orissa Sales Tax Act, 1947; (ii) Whether a subsequent change in the use of goods purchased against declaration Form IV by the purchasing dealer would disentitle the selling dealer's claim to concessional rate of tax.

Issue (i): Whether sale of size wood against declaration Form IV to a registered dealer was eligible for concessional rate of tax at 4% under the relevant entry in the Schedule of rates under Section 5(1) of the Orissa Sales Tax Act, 1947.

Analysis: The declaration in Form IV stated that the goods were purchased for manufacture or processing of goods for sale, or for mining, generation or distribution of electricity, or any form of power. It did not disclose any purchase for use as packing materials. Once such a declaration is furnished by the purchasing dealer, the selling dealer's obligation is confined to the declaration as presented, and the Revenue's remedy, if any, lies against the purchasing dealer under the statutory scheme.

Conclusion: The sale was eligible for concessional rate of tax at 4% and the point is answered in favour of the assessee.

Issue (ii): Whether a subsequent change in the use of goods purchased against declaration Form IV by the purchasing dealer would disentitle the selling dealer's claim to concessional rate of tax.

Analysis: A subsequent deviation from the declared use does not fasten liability on the selling dealer. The legal consequence of any breach of the declaration by the purchasing dealer is that the differential tax may be recovered from that purchaser, not from the seller who acted on the declaration in Form IV.

Conclusion: A subsequent change in use by the purchasing dealer does not disentitle the selling dealer from the concessional rate of tax, and the point is answered in favour of the assessee.

Final Conclusion: The revision succeeded, the departmental orders were set aside on the questions decided, and the seller was held entitled to the concessional tax benefit.

Ratio Decidendi: Where the selling dealer acts on a valid declaration in the prescribed form, later misuse or deviation by the purchasing dealer does not negate the seller's entitlement to concessional tax, and any differential liability must be pursued against the purchasing dealer.

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