sale against H forms

This query is : Resolved 

11 December 2010

I am trader of plastic raw material. In 2005-06 a exporter purchase goods from me against H form at that time I was not knowledge of H form but generally I ask one sale tax inspector that if any exporter purchase goods from me against H form, I will charge tax from him or not the inspector said no but with H form B/L was complusory you collect from him. Now my case is under assessment and ETO cheak the H form along with B/L and reject that H forms because I sale Plastic Raw material and in B/L mention Plastic sheets. So plz tell me what can i do becasue ETO impose me penalty at total sale which I made to that exporter.

R.Ramachandran (Expert)
11 December 2010

Dear Mohit,
Prima facie, it appears the ETO is wrong. For the simple reason, if the purchaser issues Form-H stating that he needs these goods for exports, your job/responsibility is over. It is the fault of the person who gave Form -H to you and not yours. The Authorities cannot go after you.

Mohit (Querist)
11 December 2010

Sir ETO said that H form is only valid in that case when the exporter export same goods/comodity which it can purchase against H form in my case the exporter change the shape of goods which it can purchase from me.

R.Ramachandran (Expert)
11 December 2010

Dear Mr. Mohit,
That is exactly what I am saying. The purchaser told that he wants to export the goods purchased from you. Since the goods are meant for Export no Sales Tax is chargeable. Is there any mechanism with you to ensure that the purchaser would export the same goods? NO. Therefore, the Government itself has prescribed a declaration to be furnished by the purchaser that he would be exporting the goods purchased. This declaration is in Form-H. Once you have a duly signed Form-H from the purchaser, you are not responsible if the purchaser has not exported the same goods. It is the purchaser who has furnished Form-H, but did not export the same goods who is responsible and answerable. For the fault of the purchaser you cannot be held responsible, so long as you produce Form-H for the sale.

Mohit (Querist)
11 December 2010

very very Thanks Sir If any other enquiry related to that I will ask you

Thanks again

Khaleel Ahmed (Expert)
11 December 2010

Well advised and Resolved.

s.subramanian (Expert)
11 December 2010

I agree with Mr.Ramachandran.

B.Chakrapani Warrier (Expert)
12 December 2010

Selling dealer is not bound to verify correctness of the declaration form , here Form H, or the manner in which purchasing dealer uses goods. Selling dealer could not be denied the benefit of the concession. This was the crux of the decision in

DC(Taxes),Ernakulam Vs. Bharat Refineries Ltd,Madras (1978)42 STC 225(Ker).

malipeddi jaggarao (Expert)
Click to Talk
13 December 2010

query resolved in the best terms

Mohit (Querist)
02 March 2011

Sir Kindly tell me from I get the copy of decision of DC(Taxes),Ernakulam Vs. Bharat Refineries Ltd,Madras (1978)42 STC 225(Ker).

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