1964 (9) TMI 37 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Justification of the turnover attributed to the assessee based on the broker's accounts.
2. Opportunity for the assessee to cross-examine the sellers and buyers.
3. Excessiveness of the turnover fixed based on the broker's accounts.
4. Validity of the additional sales tax on imported sugar under Article 301 and Article 304 of the Indian Constitution.

Detailed Analysis:

1. Justification of the Turnover Attributed to the Assessee Based on the Broker's Accounts:
The broker's accounts explicitly referred to the assessee by name as Ayyaswami Nadar or A. Nadar. Despite the broker's death, his earlier statement, made in the presence of the assessee, confirmed that the transactions recorded in his accounts were indeed related to the assessee. The broker's accounts, which were maintained regularly, showed that the assessee had purchased and sold significant quantities of sugar. The authorities found these accounts credible and justified in attributing the turnover to the assessee.

2. Opportunity for the Assessee to Cross-examine the Sellers and Buyers:
The assessee argued that they were not given a reasonable opportunity to cross-examine the sellers and buyers mentioned in the broker's accounts. However, the court noted that the broker had been examined during the earlier stages of the assessment proceedings, and his statement was available for cross-examination by the assessee. The broker's accounts were maintained in the regular course of business, and many entries were traceable in the assessee's regular accounts, thus justifying the reliance on these accounts.

3. Excessiveness of the Turnover Fixed Based on the Broker's Accounts:
The assessee contended that the turnover fixed was excessive. The court, however, found that the broker's accounts were credible and that the entries therein were traceable in the assessee's regular accounts. The tribunal had also considered the purchase price recorded in the assessee's accounts, which ranged from Rs. 87 to Rs. 100-8-0 per bag, and determined that fixing the sale price at Rs. 100 per bag was reasonable. The onus was on the assessee to produce his accounts to substantiate his plea, which he failed to do.

4. Validity of the Additional Sales Tax on Imported Sugar under Article 301 and Article 304 of the Indian Constitution:
The petitioner argued that the additional sales tax on the first sale of imported sugar was an unfair restriction on inter-State trade and thus ultra vires Article 301. However, the court referred to Article 304(a), which allows the imposition of taxes on imported goods if similar goods manufactured or produced in the State are subject to similar taxes, ensuring no discrimination. The court found that the additional levy on imported sugar did not discriminate against imported goods and was within the safeguards provided in Article 304(a). The court also cited precedents where similar provisions were upheld, reinforcing that the levy was not discriminatory and was intra vires the State Legislature.

Conclusion:
The court dismissed the revision case, upholding the order of the Tribunal regarding the determination of the escaped turnover and the levy of assessment thereon. The contentions of the petitioner were overruled, and the additional sales tax on imported sugar was deemed valid under the constitutional provisions. The petition was dismissed with no order as to costs.