The provisions of a notification requiring the production of declarations in form IXC for grant of exemption under the Bihar Sales Tax Act, 1959, were directory and not mandatory.

G. C. Bharuka, J. - Pursuant to the directions of this Court the Commercial Taxes Tribunal, Bihar, Patna, has referred the following two questions for consideration to this Court :

"1. Whether in the facts and circumstances of the case the Tribunal was justified in holding that the applicant was liable to pay special sales tax on the sale of fertilizers which it has purchased from the Fertilizer Corporation of India on account of non-production of declaration in form IXC and whether the requirement of production of declaration in form IXC is mandatory for grant of exemption ?

2. Whether under the admitted facts and circumstances of the case, the incidence of sales tax in respect of the amount of Rs. 2,60,43,960.04 being the amount recovered through fair price shop for supply to them under the order of the State Government of rice procured under the Bihar Essential Foodgrains Procurement Order, 1968, fell on the petitioner ?"

The proceedings relate to the financial year 1969-70. The Food Corporation of India, which is the assessee, is a Corporation established by the Central Government under section 3 of the Food Corporation Act, 1964. It is engaged in purchase and sale of foodgrains and fertilizers and is a registered dealer under the provisions of the Bihar Sales Tax Act, 1959 (hereinafter for brevity "the Act" only).

The basic facts, as found by the Tribunal, are being noticed hereunder. The assessee had purchased fertilizers worth Rs. 34,19,997.92 from M/s. Fertilizer Corporation of India and it sold the same for Rs. 36,59,570.92. During the course of assessment proceedings, the assessing officer on examination of book of accounts and verification of purchase invoices, having been fully satisfied that the assessee had paid tax on purchase of fertilizers to the selling dealer, except for a sum of Rs. 2,39,573.00, allowed deduction of Rs. 34,19,997.92 from the gross turnover. The assessee being aggrieved by part disallowance, went in appeal before the Deputy Commissioner, who instead of granting any relief, reversed the order of the assessing officer on the ground that since the petitioner had not furnished declarations in form IXC duly issued by the selling dealer, notwithstanding the fact that he had paid the tax, the deduction was not permissible in law. According to him the provisions relating to furnishing of the said declarations was mandatory for claiming desired deduction. On revision the Tribunal affirmed the view of the appellate authority. These facts have given rise to first question.

So far as the second question is concerned, the relevant facts are that under the provisions of the Bihar Essential Foodgrains Procurement Order, 1968 issued by the State of Bihar under section 3 of the Essential Commodities Act, 1955 the assessee was appointed as the procurement agent to compulsorily purchased rice from the millers, dealers and cultivators at procurement rates and thereafter supply the same as per the directions of the Government to the fair price shop dealers. The fair price shop dealers, apart from paying the cost of rice to the Food Corporation of India being at the rate of Rs. 111.17 per quintal, were also required to deposit Rs. 6.83 in the treasury in the State Government's account being Rs. 3.50 per quintal towards incidental charges land Rs. 3.33 per quintal against sales tax under the Act. In view of these facts the assessing officer granted the exemption to the petitioner in respect of the transactions of sales to fair-price shop dealers but the Deputy Commissioner on appeal reversed the finding on this score as well by holding that the assessee being the first seller was liable to pay sales tax irrespective of the fact whether any amount had been deposited by the purchaser in the Government account or not. The Tribunal in order to resolve the dispute amicably, took the view that instead of approaching the dispute by pursuing through legal technicalities, it is better that the assessing officer ex