TaxTMI 
TaxTMI 
1990 (2) TMI 294
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....tax payable by a dealer in respect of any sale of the goods mentioned in the First Schedule by such dealer to another for use by the latter as component part of any other goods mentioned in the said Schedule, which he intends to manufacture inside the State for sale, shall be at the rate of only one per cent on the taxable turnover relating to such sale. Entry 130 of the First Schedule mentioned "all electrical goods and other accessories". The contention was that super enamelled copper wire comes under the entry as accessories and the purchaser uses the same in the manufacture of electrical goods coming under entry 130. But the assessing officer held that super enamelled copper wire is not a component part of electrical transformers as in the case of fan blade to fans and steering wheel to motor vehicles. In that view of the matter he held that the super enamelled copper wire is only an accessory to electrical goods and not a component part to claim benefit of the section. 3.. Appeals against the orders were dismissed by the Deputy Commissioner holding that what is sold by the assessee is super enamelled copper wire, and the case of the assessee that the super enamelled copper wi....
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....e proviso to section 5(3) of the Kerala General Sales Tax Act and when there is no allegation that there was collusion between the assessee and the buyer? C. When the Legislature has provided for imposition of penalty under section 45A(1)(f) and prosecution under section 46(2)(d) for incorrect issue of form 18 declarations by the buyer, was the Tribunal justified in upholding the denial of concessional rate of tax of 1 per cent to the seller-assessee? D. Was the Tribunal justified in law in ignoring the ratio of the three decisions of this Honourable Court in [1974] 34 STC 370 (Radhakrishna Chetty & Bros. v. Assistant Commissioner of Sales Tax), [1978] 42 STC 225 (Deputy Commissioner of Sales Tax v. Bharat Refineries Limited) and [1981] 48 STC 37 (Deputy Commissioner of Sales Tax v. Burmah Shell Oil Storage and Distributing Company Limited)? Do they not cover squarely the issue in dispute and is there any scope for deviating from the ratio of these decisions? E. Has the decision in [1977] 40 STC 437 (Ker) (Paul Lazar v. State of Kerala) and 47 STC 77 (sic) any bearing or relevance in deciding the issue whether the denial of concessional rate of tax to the seller is justified in ....
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....e said Schedule which he intends to manufacture inside the State for sale, shall be at the rate of only one per cent. This is a concession given by the Legislature so that the purchaser need pay to the seller only tax at a concessional rate. The condition precedent for availing such concession, it is stated, is that the seller as well as the purchaser must be dealers of the goods sold by the seller. It is also stated that the proviso obliges the seller to furnish to the assessing authority in the prescribed manner a declaration duly filled in and signed by the dealer to whom the goods are sold containing the prescribed particulars in the prescribed form. Rule 28 of the Kerala General Sales Tax Rules, 1963, makes the necessary prescription regarding the manner of furnishing the declaration and form of the declaration. The declaration shall be in form No. 18. Form No. 18 should be obtained by the purchasing dealer from the assessing authority on payment of fee and he should furnish the same to the selling dealer, duly filled up and signed by him. No selling dealer shall accept any declaration except in a form obtained by the purchasing dealer on application from the assessing authori....
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....e goods in the First Schedule and was to a dealer for use by the latter as component part of any other goods mentioned in the said Schedule. The proviso specifies how he should satisfy himself that it is for the use by the purchasing dealer as component part of any other goods mentioned in the First Schedule. He has to obtain a declaration form from the purchasing dealer and furnish it to the assessing authority. When once he complies with the proviso his responsibility in the matter must necessarily cease. The decision clearly lays down that the responsibility of the seller is to see that the proviso is complied with. The second proviso clearly states that the goods sold are capable of being used as component part of any of the goods mentioned in the First Schedule. So it was the duty of the selling dealer to satisfy that the super enamelled copper wire sold by the petitioner is capable of being used as component part of electrical goods. Therefore the said decision will not help the petitioner. Next case referred to is State of Tamil Nadu v. Madras Refineries Limited [1978] 41 STC 306, a decision of the Madras High Court. In that case the assessee importing crude oil and refinin....
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....ds covered by the First Schedule. It was subsequently found by the authorities that naphtha was used as fuel for producing hydrogen and that the hydrogen in turn was used for manufacture of chemical fertilisers. The question was whether the oil company could be denied the benefit of the concessional rate, in view of the fact that there could be no use of naphtha directly in the manufacture of chemical fertilisers. It was held that the oil company could not be denied the benefit of concessional rate. The form required only a declaration as "certified that the goods specified in the First Schedule and purchased from you as per bill/cash memo stated below supplied under your challan are for use by me as component part of other goods specified in that Schedule which I intend to manufacture inside the State for sale". The Division Bench of this Court observed that: "When once the declaration in form 18 is obtained by the selling dealer from the purchasing dealer and is furnished to the sales tax authorities, the selling dealer satisfies the requirements of the statute and he is entitled to claim the concessional rate of one per cent, irrespective of the correctness of the declaration ....
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....tificate and declaration in form III-A may be examined by the taxing authorities but not the correctness or the truthfulness of the statements made therein. The taxing authorities may examine whether the certificate was issued in collusion or was forged or fabricated, but not enquire whether the purchasing dealer had subsequently sold the goods or consumed them. Furnishing of the certificate in form III-A raises a presumption that the goods are for resale. It was held in that case that when the registered dealer had been granted exemption in the original assessment in regard to sales to registered dealers who had furnished the requisite certificate in form III-A that the goods were intended for resale in the same condition, the assessing authority had no jurisdiction to reopen the assessment on the basis that he had received information that the purchasing dealer had consumed the goods, especially as the appellate authority had held that there was no collusion on the part of the appellant, the selling dealer. 6.. Even though the above cases are cited for the proposition that the responsibility of selling dealer is only to produce the declaration duly signed in the manner prescrib....