TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 303
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....es, 1975 was legally and rightfully entitled to deduction under Section 4(2)(a)(v) of Delhi Sales Tax Act, 1975, on account of sales made to registered dealer?" 3. It may be mentioned at this stage that the dispute relates to Assessment Year (AY) 2000-01 when Delhi Sales Tax Act, 1975 was in vogue. Notwithstanding the repeal of said law, the remedy of appeal survives in terms of Section 106 of DVAT Act. 4. The background facts may be noted at the outset. 5. The assessee is a dealer in electrical goods, registered for purposes of sales tax with ward no. 99. The transactions of sale of certain items, which are subject matter of the controversy, occurred during the period 28.07.2000 to 09.10.2000 for total sale consideration of Rs. 1,53,50,908/-. It is the claim of the assessee that these sales were effected against purchase order dated 27.06.2000 by the purchasing dealer. The assessee relies on form ST-35 bearing No. 5AA-967198, for Rs. 1,53,50,908/- (hereinafter referred to as "the ST-35 form"), issued by the purchasing dealer. 6. There is no dispute that the purchasing dealer is registered with the Sales Tax Authorities for purposes of Section 4 of Delhi Sales Tax Act. It is no....
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.... half months and on that basis treated it as a case of collusion. It also noted that the purchasing dealer had not submitted utilization certificate with regard to the goods thus sold to it by the appellant against the ST-35 form to its own assessing authority. 10. The appellant appealed against the order dated 28.02.2005 but unsuccessfully. The order dated 06.02.2010 of the first appellate authority was carried in appeal to the Tribunal which rejected the contentions of the appellant and upheld the assessment. 11. By virtue of Section 3 of Delhi Sales Tax Act, 1975, every dealer whose turnover during the assessment year exceeds the prescribed taxable quantum is liable to pay sales tax under the said law on all sales effected by him. Section 4 prescribes the rate at which the sales tax payable by a dealer under this law would be levied. The expression "turnover" was defined in Section 2(o) to mean the aggregate of the amounts of sales price receivable, or, if so elected, actually received by the dealer, in respect of sale of goods, made during the prescribed period, after deducting the amount of sale price, if any, refunded. 12. The "taxable turnover", by virtue of Section 4(2),....
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....chased shall be allowed to be deducted from the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer." (emphasis supplied) 14. In exercise of the powers conferred by Section 71 of the Delhi Sales Tax Act, the administrator had framed Delhi Sales Tax Rules, 1975. For present purposes, rule 11 is relevant. It, inter alia, prescribed that in calculating the taxable turnover, the registered dealer is permitted to deduct from his turnover the value of the sale consideration in which regard there is a declaration obtained by him in form ST-35 issued to a registered dealer. The form ST-35 prescribed under the said rule 11 is in the nature of a declaration by a registered dealer holding valid licence with regard to purchases of specified goods. Noticeably, the declaration by the purchasing dealer would certify the bill/cash memo against which the purchase is made of such goods (properly described with value also indicated) as may attract the exemption under any of the categories of sub-clause (v) of Section 4(2)(a) quoted above. 15. Clause (XXXIV) of rule 11 would correspondingly permit such purchases to be treated by the purchasing deale....
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.... the selling dealer. It is submitted that the claim of the selling dealer for exemption under Section 4(2)(v) on the basis of the ST-35 form could not have been rejected for any defect in the said ST-35 form or for doubtful activities of the purchasing dealer or default on the part of the purchasing dealer in submitting proper utilization certificate. It is argued that the purchasing dealer here was indisputably a registered dealer and that the ST-35 form was officially issued to it and there was no reason for the selling dealer to doubt its validity or admissibility for purposes of the transaction in question. It is the contention of the appellant that the doubts entertained for the reason that the purchase order was valid for a period of three and half months are unfair and unjust since such factor could not lead to inference of the transaction being suspect or collusive. It was submitted that the Tribunal has wrongly referred to the circular of the department to uphold the impugned assessment order and that material gathered behind the back of the assessee, with which it was not properly confronted, has been used to impose tax liability which is improper. 19. The argument of in....
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....e incurs a penalty under section 10. That penalty is incurred by the purchasing dealer and cannot be visited upon the selling dealer. The selling dealer is under the Act authorized to collect from the purchasing dealer the amount payable by him as tax on the transaction, and he can collect that amount only in the light of the declaration mentioned in the certificate in Form 'C'. He cannot hold an enquiry whether the notified authority who issued the certificate of registration acted properly, or ascertain whether the purchaser, notwithstanding the declaration, was likely to use the goods for a purpose other than the purpose mentioned in the certificate in Form 'C'. There is nothing in the Act or the Rules that for infraction of the law committed by the purchasing dealer by misapplication of the goods after he purchased them, or for any fraudulent misrepresentation by him, penalty may be visited upon the selling dealer." (emphasis supplied) 22. In the case of Prince Plastics & Chemical Industries and Ors. v. Commissioner of Sales Tax and Ors. (2003) 131 STC 372 (Del.), this court examined the consequences of default on the part of the purchasing dealer in terms of ....