1948 (4) TMI 1 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the petitioner is a "dealer" as defined in Section 2(b) of the Madras General Sales Tax Act, 1939.
2. Burden of proof regarding the petitioner's turnover exceeding Rs. 10,000.
3. Nature of proceedings under the General Sales Tax Act-whether they are purely criminal or quasi-criminal.

Detailed Analysis:

1. Whether the petitioner is a "dealer" as defined in Section 2(b) of the Madras General Sales Tax Act, 1939:
The primary issue was whether the petitioner acted merely as a broker or as a dealer. The petitioner contended that he only brought together sellers and purchasers and earned a commission without handling or having dominion over the goods. The prosecution argued that the petitioner effected sales and carried on the business of selling goods. The court examined evidence from witnesses (P.W. 1 to P.W. 5) and found that the petitioner sometimes acted as a broker and sometimes as a seller with dominion over the goods. The court concluded that when the petitioner had full dominion and possession over the goods and fixed the price himself, he was a "dealer" within the meaning of the Act.

2. Burden of proof regarding the petitioner's turnover exceeding Rs. 10,000:
The court discussed the burden of proof in proving the petitioner's turnover exceeded Rs. 10,000, which would obligate him to submit the "A" return. The petitioner's counsel argued that the prosecution must prove beyond a reasonable doubt that the petitioner was liable to submit the return. The court referred to previous judgments and legal principles, indicating that in quasi-criminal cases, it is sufficient for the prosecution to provide prima facie proof of liability. The court found that the prosecution had provided prima facie evidence through Exs. P-1, P-7 series, and P-8, showing a turnover of Rs. 57,809. The burden then shifted to the petitioner to prove the incorrectness of this account, which he failed to do.

3. Nature of proceedings under the General Sales Tax Act-whether they are purely criminal or quasi-criminal:
The court analyzed whether proceedings under the General Sales Tax Act are purely criminal or quasi-criminal. It referred to various legal authorities and concluded that such proceedings are quasi-criminal. The court noted that while the prosecution must provide prima facie proof of the offence, the burden then shifts to the accused to disprove the prosecution's case. The court emphasized that the standard of proof required in quasi-criminal cases is not as stringent as in purely criminal cases.

Conclusion:
The court found that the petitioner acted as a "dealer" when he had dominion over the goods and fixed the price himself. The prosecution provided prima facie evidence of a turnover exceeding Rs. 10,000, shifting the burden to the petitioner, who failed to disprove it. The court held that proceedings under the General Sales Tax Act are quasi-criminal. Consequently, the petitioner was liable under the Act for failing to submit the "A" return. The court reduced the petitioner's fine to Rs. 50 or simple imprisonment for two weeks, considering the difficulty in ascertaining the exact turnover and the fact that the petitioner had already paid the tax. The petitions were otherwise dismissed.