The Delhi High Court ruled that the selling dealer (petitioner) is not guilty of ‘wilful omission’ in filing his sales tax return on the basis of the ST-1 Form which was duly furnished to him by the purchasing dealer in respect of the goods not specified in the Registration Certificate of purchasing dealer.
The Court said “petitioner has relied upon such Forms and there is no material on record to suggest that the petitioner accepted the ST-1 Forms with the knowledge that the declarations made thereunder by the purchasing dealer were wrong.”
The Court, however, ruled that the petitioner is not allowed to claim deductions for such a sale.
“…..the selling dealer can verify whether the purchaser is a registered dealer and holds the requisite registration certificate and it is within the control of the selling dealer to verify this at the time of the sale”. “Thus, whereas in the case of misutilization of goods by the purchaser, the amount of tax payable can be collected from the purchaser, there is no such provision in the Delhi Sales Tax Act which enables collection of tax from the purchaser, in the event, he makes a false declaration regarding holding of registration certificate with respect to the goods so purchased,” the Court observed.