1955 (3) TMI 28 - HC - VAT and Sales Tax

Summary

Issues:
- Deduction claim of Rs. 24,78,890 under section 5(2)(a)(v) of the Sales Tax Act of 1944.
- Disallowance of deduction by Sales Tax Officer, Commissioner, and Board of Revenue.
- Dispute regarding production of documentary evidence by the assessee.
- Review of the case by the High Court.

Detailed Analysis:
The case involved an assessee, a limited company, regarding a deduction claim of Rs. 24,78,890 under section 5(2)(a)(v) of the Sales Tax Act of 1944 for the financial year 1946-47. The Sales Tax Officer disallowed this claim, allowing only Rs. 12,40,493 based on an estimate, due to lack of evidence of jute products being dispatched outside Bihar. The Commissioner and Board of Revenue upheld this decision, stating the assessee failed to produce evidence despite opportunities.

The assessee contended that documentary evidence was indeed presented to support the deduction claim, including inspection notes and reports. The Board of Revenue initially dismissed this argument but later, upon review, acknowledged the evidence was produced. The High Court was then tasked with determining whether the assessee was entitled to the full deduction amount based on the evidence provided.

The High Court found that the previous authorities had erred in assuming the lack of evidence, as proven by subsequent investigations. The Court held that the assessee was entitled to the full deduction of Rs. 24,78,890 under section 5(2)(a)(v) instead of the lesser amount allowed based on an estimate. The State of Bihar conceded to the assessee's claim based on the evidence presented.

Ultimately, the High Court ruled in favor of the assessee, declaring the previous orders disallowing the deduction as legally invalid. The Court emphasized that the question at hand was a matter of law, and the assessee's entitlement to the deduction was supported by the evidence produced. As the assessee was also at fault for not presenting evidence earlier, no costs were awarded. The reference was answered in favor of the assessee, granting the full deduction amount as claimed.