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2010 DIGILAW 2524 (PNJ)

STATE OF HARYANA v. INALSA LIMITED.

2010-09-01

ADARSH KUMAR GOEL, AJAY K.MITTAL

body2010
JUDGMENT Adarsh Kumar Goel :- The Haryana Tax Tribunal, Chandigarh has referred the following question of law under section 42 of the Haryana General Sales Tax Act, 1973 (for short, "the Act") for the opinion of this court, arising out of its order dated June 15, 2000 in S.T.A. No. 37 of 1998-99 : "Whether, on the facts and in the circumstances of the case, claim of sales made to registered dealers can be allowed in terms of sub-clause (ii) of clause (a) of sub-section (1) of section 27 of the Haryana General Sales Tax Act, 1973 read with rule 21 of the Haryana General sales Tax Rules, 1975 in respect of sales claimed to have been made to someone, who is non-existent as a dealer so not a dealer registered under the Act ibid, at the authority of certain declarations in form ST 15, which were stolen from an office of the Department, furnished to the selling registered dealer and produced by him before the assessing authority simply because the selling registered dealer is not proved to have the knowledge of the forms having been stolen ?" During the assessment, the dealer claimed deduction in respect of sales to registered dealers on the strength of prescribed form under section 27 of the Act. Though the assessing authority allowed the said claim, revisional authority exercising suo motu jurisdiction disallowed the same on the ground that the buyer - dealer was in fact unregistered and was non-existent and had used forms which had been stolen from the office of the Department. On appeal of the dealer to the Tribunal, this view was reversed with the observation that the forms being admittedly genuine, the assessee - dealer had no means to ascertain whether the dealer who presented the genuine forms was in fact registered dealer or not. The finding recorded is as under : "I have also seen these forms. They carry the seal of the issuing office. They also carried the initials of issuing authority. They also carry the name and address of the above Pawan Trading Company and also its alleged registration No. The Department concedes that no action was taken against this Pawan Trading Company because this was not a registered dealer. It is difficult to imagine as to how did the so called stolen forms carry the seal and signatures of the issuing authority. It is difficult to imagine as to how did the so called stolen forms carry the seal and signatures of the issuing authority. The format of the form requires that full address and registration of the firm to whom these forms are issued will be filled in and authenticated by the signatures and seal of issuing authority. The seal on these forms is exactly similar to the seal or accepted forms. The ink is also similar and therefore any person with ordinary prudence cannot be held guilty if he believes that forms are genuine and issued in ordinary course of business. In the absence of presumption of knowledge by a public notice, the guilt cannot be passed on to the dealer who accepted the forms. Therefore only ground left is whether it is the responsibility of the present dealer who accepted the form to ensure that the presenter of forms is a dealer entitled to present the forms by going behind the forms to enquire whether the presenter had a title to present the forms or not. No ruling or law has been cited in this connection either by the revisionary authority or before me." We have heard learned counsel for the State. Contention raised on behalf of the State is that the forms being stolen forms, the respondent - dealer could not have got the benefit of sale to registered dealers on the strength of furnishing prescribed declaration. Reliance has been placed on judgments of the honourable Supreme Court in State of Madras v. Radio and Electricals Ltd. [1996] 18 STC 222 (SC) and Chunni Lal Parshadi Lal v. Commissioner of Sales Tax, U.P., Lucknow [1986] 62 STC 112 (SC). We are unable to accept the submission. The judgments relied upon do not advance the submission on behalf of the State. Only requirement is that the selling dealer has to satisfy himself that the purchasing dealer was genuine. Once the purchasing dealer has furnished genuine declarations duly issued by the Department, it could not be held that the selling dealer acted negligently or did not satisfy himself about the genuineness of the purchasing dealer. Finding recorded by the Tribunal referred to above clearly shows that the forms carried the seal of the issuing office and initials of the issuing authority. They also carried the name and address of the purchasing dealer and its alleged registration number. Finding recorded by the Tribunal referred to above clearly shows that the forms carried the seal of the issuing office and initials of the issuing authority. They also carried the name and address of the purchasing dealer and its alleged registration number. The Department did not take any action against the purchasing dealer. It is not a case where the Department was not satisfied about genuineness of the stand of the assessee - dealer that he had satisfied himself about the genuineness of the forms and the purchasing dealer. In such circumstances, deduction allowed by the assessing authority as upheld by the Tribunal could not be held to be illegal. Accordingly, we answer the question proposed against the State and in favour of the respondent. The reference is disposed of accordingly.