RAM PAL MADAN GOPAL Vs. PUNJAB STATE

JUDGEMENT

(1.) FIRM Messrs Ram Pal Madan Gopal, Chaura Bazar, Ludhiana, has approached this Court under Section 22 (2) of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act), for a mandamus to the Financial Commissioner to refer to this Court for decision of the question of law, arising out of his order dated 10th January, 1961.

(2.) THE petitioner-firm is a registered dealer within the contemplation of the Act and is alleged to have filed returns for all the four quarters of the assessment year 1954-55 declaring their gross turnover at Rs. 9,12,341-6-6. Out of this turnover they claimed deductions for Rs. 9,03,090-3-0 on account of sales stated to have been made to registered dealers and Rs. 2,207-8-0 on account of exports thus leaving a taxable turnover of Rs. 7,043-11-6 only. In respect of this turnover a sum of Rs. 220-2-6 was deposited as tax under Section 10 of the Act.

(3.) IN response to a notice in Form S. T. XIV the accounts were produced by the petitioner-firm which were examined by the Assessing Authority and by virtue of the order dated 12th March, 1957, the deductions of sale to five registered dealers were disallowed. The order of assessment is annexed with the petition. According to this order, the transactions mentioned above were held not to be genuine because purchases worth lakhs were shown against the purchasers but no corresponding sales made by them (the purchasers) had been proved and that it was also not possible to contact them at their registered places of business for verifying the purchases and further disposal thereof. The registered certificates obtained by the said purchasers were also, according to the averments in the petition, held by the Assessing Authority to have been fraudulently obtained and steps were being taken for the cancellation of their registered certificates. The petitioner according to the averments in the petition had produced the declaration of the said registered dealers required under Section 5 (2) (a) (ii) of the Act read with Rule 26 of the Sales Tax Rules. The only duty cast on the petitioners was to obtain a declaration required under Section 5 (2) (a) (ii) and it was the duty of the department to see that the registered dealers were genuine dealers and not bogus ones. If a registered dealer purchases goods from the petitioner-firm and gives the necessary declaration, it is enough and the petitioner-firm need not concern itself with the subsequent dealings on the part of the purchaser. There is no evidence or material on the record to show that any one of the dealers concerned was at the time not a registered dealer or that he made bogus purchases. In the circumstances the disallowance of the deductions claimed on account of the sales to registered dealers by the Assessing Authority had been described in the petition to be wholly illegal and unjustified.