V.N Khare, J.:— This sales tax revision under section 11(1) of the U.P Sales Tax Act (hereinafter referred to as the Act) at the instance of assessee has come up on reference to us made by a single Judge of this Court in view of conflict of decisions between the two learned single Judges of this Court in the matter of interpretation of section 3-D(7)(a) of the Act. In the case of Commissioner of Sales Tax v. Kailash Trading Co., 1981 UPTC 821, a learned single Judge of this Court has taken the view that no dealer is entitled to exemption under section 3-D(7) of the Act unless he produces the certificate prescribed in form III-C(2). A contrary view has been taken by another single Judge of this Court in the case of Abdul Ghani Banney Khan v. Commissioner of Sales Tax, 1982 UPTC 665. In the said case the learned single Judge was of the view that even in the absence of the dealer furnishing form III-C(2), the assessee could get tax exemption by furnishing other documentary evidence on the tax-paid purchases made by him.

2. The applicant-assessee is a dealer in foodgrains. The applicant declared its turnover in the assessment year 1974–75 at Rs. 16,50,860.10. The assessee claimed to have made the tax-paid purchases of Rs. 47,808 from three dealers of the district Etah. The transactions amounting to Rs. 47,803 of the purchase were disallowed by the Sales Tax Officer as the assessee failed to produce necessary form III-C(2) although his books of account were accepted. Consequently the turnover was increased to Rs. 16,98,568.09. The appeal against that assessment order was dismissed. A second appeal filed against that order met the same fate. The Sales Tax Tribunal was of the view that for claiming exemption under section 3-D(7), it is necessary for the dealer to have filed form III-C(2) which is mandatory and in absence of which no tax exemption can be allowed. The Tribunal was also of the view that it is not open to the assessee to examine other evidences to rebut the presumption contained in section 3-D(7)(a) of the Act and in any case it is not open to the assessee to adduce such evidence at the stage of the second appeal. The argument of the learned counsel for the assessee-applicant is that tax exemption under section 3-D(7)(a) of the Act could have been allowed in respect of tax-paid purchases of foodgrains by examining other evidences in absence of production of necessary form III-C(2). The case of the assessee is that it could not be denied benefit of tax exemption only because the form has been lost or destroyed and it is open to him to satisfy the assessing authority by examining other evidences in respect of tax-paid purchase of the foodgrain. In nutshell the argument is that section 3-D(7), clauses (a) and (b) are directory in nature and not mandatory. In support of his argument learned counsel relied upon the decisions given in K. Manufacturers Ltd. v. Sales Tax Officer reported in [1970] 26 STC 310 (All.) [FB], Abdul Ghani Banney Khan v. Commissioner of Sales Tax reported in 1982 UPTC 665, Sharif-Ud-Din v. Abdul Gani Lone reported in (1980) 1 SCC 403 : AIR 1980 SC 303. We shall consider these decisions slightly later.

3. The stand of the counsel for the department is that sub-section (7)(a) of section 3-D provides for the mode of proof and it is on furnishing of such a declaration or certificate obtained from the selling dealer in such form or manner within such period as being prescribed under the Rules, an assessee is entitled to sales tax exemption. In case such declaration or certificate is not furnished then it shall be deemed that the transaction was a first purchase liable to tax even though it was not the first purchase. His further argument is that this sub-section is mandatory in nature and has got to be complied with, failing which the assessee is not entitled to any exemption. On the argument of the learned counsel for the parties the question that arises for consideration is as to whether the furnishing of prescribed form for claiming tax exemption under section 3-D(7)(a) is mandatory or directory.

4. No universal rule can be laid down to distinguish between statute, i.e, imperative and that which is merely directory. But several tests have been propounded in decided cases for determining the question whether a provision in statute or rule is mandatory or directory. One of the tests is where rights, privileges, immunities are granted with a direction that certain regulations, formalities or conditions shall be complied with and it seems neither unjust nor incorrect to exact a rigorous observance of them as essential to the acquisition of right, such provision of statute or rule has been held to be imperative (see Maxwell on Interpretation of the Statutes, VI Edition, page 649). In Sharif-Ud-Din v. Abdul Gani Lone, (1980) 1 SCC 403 : AIR 1980 SC 303 it was held that where a provision of law prescribed that certain act has to be done in a particular manner by a person in order to acquire a right, benefit or a privilege, it is to be regarded as mandatory. This being a recognised test for determining statute, i.e, imperative and that which is merely directory, let us look into the provision of the statute. section 3-D(7)(a) and relevant portion of Rule 12-B framed under the Act is quoted hereunder:

“section 3-D(7)(a). Every purchase within Uttar Pradesh by a dealer, either directly or through another, whether on his own account or on account of any one else, shall for the purposes of clause (b) of sub-section (1), be deemed to be the first purchase, unless the dealer proves otherwise to the satisfaction of the assessing authority after having furnished such declaration or certificate, obtained from the selling dealer, in such form and manner and within such period, as may be prescribed.

(b) Every sale within Uttar Pradesh by a dealer, either directly or through another, whether on his own account or on account of any one else, shall, for the purposes of sub-section (2), be deemed to be a sale to a person other than a registered dealer, unless the dealer selling the goods proves otherwise to the satisfaction of the assessing authority after having furnished such declaration or certificate, obtained from the purchaser of such goods, in such form and manner and within such period, as may be prescribed.”

“Rule 12-B. Exemption from purchase or sales tax under section 3-D.— (1) The certificates or declarations referred to in sub-section (7) of section 3-D shall be in forms III-C(1), III-C(2), III-C(3), III-C(4) and III-C(5) …………….”

5. A perusal of section 3-D(7)(a) would show that it envisages three things. Firstly, it creates a legal fiction; secondly, it provides for rebuttal of presumption by an assessee; and thirdly, it lays down the mode of proof for rebutting the presumption. Let us now consider as to whether the test laid down for holding a statute mandatory is applicable to the present case. As seen earlier, first part of clause (a) of sub-section (7) of section 3-D creates a legal fiction, namely, that every purchase within Uttar Pradesh by a dealer or through another whether on his own account or on account of any one else shall for the purposes of clause (b) of subsection (1) be deemed first purchase. This is a deeming clause and the purchase aforesaid shall be deemed to be the first purchase irrespective of the fact whether it is actually so; but in order to rebut this presumption it has been provided that dealer may prove otherwise to the satisfaction of the assessing authority and the mode of proof is provided by furnishing such declaration or certificate obtained from selling dealer in such form or manner and within such period as may be prescribed. Rule 12-B prescribes the form for obtaining exemption from purchase or sales tax under section 3-D. Thus from the aforesaid it is clear that the provision of the Act permits an assessee to get a right or benefit only by furnishing such declaration or certificate from selling dealer in such manner and within such period as being prescribed. In our opinion the test as noticed earlier is applicable to the present case. If an assessee wants to take benefit of exemption of payment of sales tax he has to comply with the provisions of the Act which is essential to the acquisition of right or privilege and it has got to be complied with.

6. The legislative history of section 3-D(7)(a) also leads to the same conclusion.

7. The present section 3-D(7)(a) has been substituted by U.P Act No. 11 of 1972 and prior to that this section read as under:

“Sub-section (7). Unless the dealer proves otherwise to the satisfaction of the assessing authority, every purchase by or through a dealer shall, for the purposes of sub-section (1), be presumed to be the first purchase by such dealer and every” sale through a dealer shall, for the purposes of subsection (2), be presumed to be sale to a first purchaser.”

8. A perusal of the aforesaid sub-section shows that there was no provision for rebutting the presumption and further the mode of proof provided for rebutting the presumption was also not provided and, therefore, by the aforesaid amendment of section 3-D(7)(a) the legislature has now provided that the presumption can be rebutted in the manner prescribed in the Rules and not otherwise. The word “prescribed” has been defined in section 2(f) of the Act, means prescribed by the Rules made under this Act.

9. In Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer, [1965] 16 STC 607 (SC) it was held that where a dealer claims exemption in regard to sales to a registered dealer, the furnishing of declaration form under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act issued by the purchasing dealer is a condition for claiming exemption. We, therefore, are of the opinion that the legal presumption can be rebutted only in the manner provided under the Act read with the Rules and only after such declaration is furnished the assessee becomes entitled to tax exemption.

10. The learned counsel for the assessee strongly relied on a Full Bench decision of this Court given in J.K Manufacturers Ltd. v. Sales Tax Officer, [1970] 26 STC 310. In this case the question that arose for consideration was as to whether rule 12-A of the rules is ultra vires. Section 3-AA under which rule 12-A was framed provided that the turnover of the goods specified therein would be liable to tax at the point of sale by a dealer to the consumer. Sub-section (2) provided that unless the dealer proved otherwise, every sale by a dealer for purposes of sub-section (1) would be presumed to be to a consumer. While interpreting section 3-AA and rule 12-A the majority view observed:

“The burden is thrown upon the dealer to show that the sale was not made to the consumer. It is manifest that sub-section (2) merely enacts a rule of evidence for the purpose of giving effect to the substantive provision in sub-section (1). Sub-section (2), it will be noticed, does not indicate what should be the nature and mode of proof by which the dealer may establish that the sale made by him is not to the consumer. That has been left entirely to the choice of the dealer.”

“It may have been a different matter if sub-section (2) had read ‘unless the dealer proves otherwise in the manner prescribed ……….’, when it could have been legitimately contended that the only mode of proof available to the dealer was the mode prescribed in rule 12-A. But that, the legislature did not enact.”

11. Sub-section (2) of section S-AA merely enacted a rule of evidence and did not provide for the nature and mode of proof, but in clause (a) of subsection (7) of section 3-D such a provision has been clearly made and the presumption is to be rebutted in the manner provided under the Rule 12-B. We, therefore, are of the opinion that this case is distinguishable.

12. The next decision reported in Sharif-Ud-Din v. Abdul Gani Lone, (1980) 1 SCC 403 : AIR 1980 SC 303 relied upon by the counsel for the applicant does not support his contention and is of no help to the case of the applicant, On the contrary it helps the case of the department. In this case it was laid down that where a provision of law prescribed that certain act has to be done in a particular manner by a person in order to acquire a right, it is to be regarded as mandatory. The third decision relied on by counsel for the applicant reported in 1981 UPTC 227 is also distinguishable and does not advance the case of applicant.

13. The sheet-anchor of applicant's case is a decision by a learned single Judge of this Court reported in Abdul Ghani Banney Khan v. Commissioner of Sales Tax, 1982 UPTC 665. In this case the learned single Judge observed thus:

“For instance ‘A’ sells to ‘B’ and ‘B’ furnishes the necessary declaration forms but they are lost or destroyed in fire. Could the assessee be denied exemption only because the forms are lost or destroyed in fire? What is fundamental is sale to registered dealer. It appears the intention was that proof was not confined to only furnishing the declaration form but also proving the same to the satisfaction of the authority concerned.”

14. From this it appears that the circumstance of loss or destruction of the form weighed heavily in the mind of the learned single Judge in taking a contrary view. From this circumstance, learned single Judge inferred that the mode of proof was not confined only to furnishing of the declaration form but also envisaged proving the same to the satisfaction of the authority concerned by leading other evidences. So far this circumstance of loss or destruction of form is concerned, enough safeguard has been provided under sub-rule (23) of Rule 12-B of the Rules.

15. Sub-rule (23) of Rule 12-B provides that:

“When a duly completed certificate issued by a dealer to another is lost in transit or by the dealer to whom it was issued, the dealer issuing it shall, on demand of such dealer, issue a duplicate form to him. The duplicate form shall be issued in the same manner as the form originally issued.”

16. It is, therefore, clear that in case of loss of form a duplicate form can be issued.

17. We are clearly of the opinion that the learned single Judge, while holding that the law contemplates and entitles the assessee to lead evidence to the satisfaction of the assessing authority had not correctly appreciated the mode of proof provided under the rules for rebutting the presumption in order to get benefit of tax exemption.

18. The result of the aforesaid discussion is that sub-section (7)(a) of section 3-D of the Act is mandatory in nature and unless the proof is given, as required therein, it cannot be said that onus has been discharged and the assessee would not be entitled to exemption by examining other evidence. We, therefore, approve the decision of learned single Judge given in Commissioner of Sales Tax v. Kailash Trading Co., 1981 UPTC 821, and further hold that the view taken in the case of Abdul Ghani Banney Khan v. Commissioner of Sales Tax, 1982 UPTC 665 does not lay down the correct view of law. We accordingly overrule it. In conclusion we hold that the view taken by the sales tax authority does not suffer from any legal infirmity. The sales tax revision is accordingly dismissed but there shall be no order as to costs.