ARIJIT PASAYAT, CJ.

( 1 ) DISALLOWANCE of claim of deduction under Section 4 (2) (V) of Delhi Sales Taxact, 1975 ( in short the Act ) in respect of sales to registered dealers as made by thesales Tax Officer, Ward 61, Bikri Bhawan, New Delhi, hereinafter referred to as theassessing officer, is the subject matter of challenge in this Writ Petition.

( 2 ) A brief reference to the factual aspects would suffice. Petitioner, a dealerregistered under the)Act, claimed deduction in respect of sales stated to have beenmade to registered dealers. Fifty four declaration forms in Form ST-1 were furnishedin support of the claim. Assessing officer rejected the claim on the ground that thepurchasing dealers who had issued those forms had indicated different figures inrespect of the transactions covered by the forms. On the aforesaid ground, theassessment for the year 1983-84 was completed raising extra demand of Rs. 10,60,185. 00 additionally which is required to be dealt with under Section 50 of theact. Petitioner submitted its reply and took a stand that the claim was in order. Aprayer was made to summon the concerned purchasing dealers under Section 42 forthe purpose of verification of the Act. Since no action was taken on the request andthe extra demand was raised, the present Writ Petition has been filed.

( 3 ) PETITIONER has taken the stand that non-issuance of summons to the concernedparties amounted to violation of the principles of natural justice and a fair opportunityhas been denied. Learned counsel for the Revenue, on the other hand, submitted thatrecords of purchasing dealers were verified in detail and since the figures reflected inthe documents available with the assessing officer were different than those reflectedby the Petitioner, disallowance has been rightly made. According to him there was nodenial of opportunity and/or violation of principles of natural justice.

( 4 ) SECTION 4 of the Act deals with the rates of tax and deals with various deductionspermissible while determining the gross and taxable turnover. The turnover of adealer, as provided under Section 2 (0) means aggregate amount of sale pricereceived or receivable by the dealer subject to certain deductions. Taxable turnoverassumes importance as it is linked with quantification of tax liability of a dealer. Sub-clause (V) of Section 4 (2) (a) deals with sales made by a registered dealer to anotherregistered dealer, Such sales are allowed to be deducted from the turnover providedsuch sales have been made to the purchasing dealers for any of the three purposes,i. e. for manufacturing some other items from the goods purchased; or for resellingthem or for the purpose of using them as packing material for the goods which aremanufactured or are sold. Rule 8 of the Delhi Sales Tax Rules, 1975 ( hereinafterreferred to as the Rules) deals with authority from whom declaration forms may beobtained and used, custody and maintenance of record of such forms and the matterincidental thereto. Rule 7 stipulates conditions subject to which a dealer may claimdeduction on his turnover from sales to registered dealers. As the controversy isnonmistakably linked with Section 4 (2) (a), Rules 7 and 8, it is necessary to reproducethem:

SECTION 4 (2) (a) (v ). For the purpose of the Act, "taxable turnover" means that part of a dealer sturnover during the prescribed period in any year which remains afterdeducting therefrom: (a) his turnover during that period on - (v) sale to a registered dealer :rule 7. Conditions subject to which a dealer may claim deductionfrom his turnover on account of sales to registered dealers- 1. Adealer who wishes to deduct from his turnover the amount in respect of saleson the ground that he is entitled to made such deduction under the provisionsof sub-clause (v) of clause (a) of sub-section (2) of section 4, shall produce : (a) copies of the relevant cash memos or bills according as the sales arecash sales or sales on credit; and (b) a declaration in Form ST-

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