The petitioner is a Company, registered under the Companies Act and is engaged in the business of printing and publication of a daily newspaper and other publications. It is a registered dealer, under the K.G.S.T. and C.S.T. Acts, on the files of the 1st respondent. For printing newspaper and other journals, printing ink is an essential raw material. Section 5(3) of the K.G.S.T. Act provides for a reduced rate of tax @ 3%, payable by the dealer, in respect of sale of raw materials to industrial units, for use in the production of finished products, for sale in the State. The seller to the industrial unit can claim the benefit of payment of the reduced rate of tax, subject to the condition of furnishing a declaration, duly filled and signed by the purchasing dealer, in Form 18. So, the petitioner was purchasing the printing ink, by furnishing the necessary declaration in Form 18 and therefore, the selling dealer was paying tax only at the rate of 3%.

2. While so, the first respondent issued Ext.P1 notice, in respect of the assessment year 2000-01, purportedly under Section 45A of the K.G.S.T. Act, stating that purchase of ink by the petitioner at the concessional rate of