Sabyasachi Mukkarji, J. - (1.) This is an appeal by special leave from the decision of the High Court of Allahabad in Sales Tax Reference No. 603 of 1971 under S. 11(5) of the U. P. Sales Tax Act, 1948 (hereinafter called the 'Act'). The question referred to the High Court under S. 11(5) of the Act was as follows:-"Whether, on the facts and in the circumstances of the case, the dealer could be declared non-taxable on sales of yarn for Rs. 8,70,810/-, which he made against IIIA Forms though the purchaser instead of selling the said yarn in the same condition consumed the same -
(2.) The Division Bench of the Allahabad High Court. was of the opinion that the controversy raised in the reference was covered by the decision of the Full Bench of the said High Court in Commr. Sales Tax, Uttar Pradesh v. Shankar Lal Chandra Prakash (1970) 26 STC 386 where it was hold that the certificate in Form IIIA was only a prima facie evidence of the fact that the goods had not been sold to a consumer. The Division Bench of the Allahabad High Court was further of the opinion that that certificate was not conclusive evidence and the department could go behind the certificate and if it found that the goods had not been resold in accordance with the certificate given in Form IIIA and had been consumed, in such a case the department could ignore the certificate and levy tax on the selling dealer. In those circumstances the revising authority was wrong, according to the High Court, in holding that the assessee was not liable to tax even if the department had found that the yam had been consumed by the purchaser and not re-sold. The Division Bench answered the question in the negative in favour of the Commissioner and against the assessee. The assessee has come up in appeal as mentioned hereinbefore by special leave.
(3.) In order to appreciate the controversy, it is necessary to refer to certain facts and findings.;