1972 (9) TMI 121 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Board of Revenue and Deputy Commissioner under section 34 of the Madras General Sales Tax Act, 1959.
2. Validity of assessing a dissolved firm for tax liability.
3. Merits of the order passed by the Board of Revenue on the disputed turnover.

Detailed Analysis:

1. Jurisdiction of the Board of Revenue and Deputy Commissioner:
The appellants contended that the Board of Revenue and Deputy Commissioner lacked jurisdiction under section 34 of the Act to conduct a roving enquiry after the assessing and appellate authorities had thoroughly examined the matter. The Board of Revenue directed the Deputy Commissioner to conduct further inquiries to determine if a disputed turnover represented purchases outside the State. The Deputy Commissioner's report highlighted discrepancies in the evidence and concluded that the appellants' vouchers were bogus. The court held that the Board of Revenue had the authority to order the examination of witnesses who had given statements at various stages of the proceedings to ascertain the nature of transactions. The court found the Board of Revenue's actions within its revisional jurisdiction under section 34 of the Act.

2. Validity of assessing a dissolved firm:
The appellants challenged the assessment of the firm after its dissolution. The court found this contention untenable, citing Section 19-A of Madras Act 12 of 1968, which allows for the levy of tax on a dissolved firm's partners for the period up to dissolution. The partners remain jointly and severally liable for tax payment, regardless of assessment timing.

3. Merits of the order passed by the Board of Revenue:
The dealers claimed exemption on a disputed turnover by asserting it represented purchases outside Madras State. However, evidence revealed inconsistencies and discrepancies in the vouchers provided by the appellants. For instance, one dealer denied doing business in cardamom and stated that the appellants obtained registration certificates in his name for fraudulent purposes. The court noted that transport of large quantities of cardamom by head loads and carts was improbable, and some vouchers were inconsistent with lorry owners' accounts. Ultimately, the court upheld the Board of Revenue's order, finding that the appellants failed to provide acceptable evidence to support their claim of purchasing cardamom outside the State.

In conclusion, the court dismissed the tax case, upholding the Board of Revenue's order and emphasizing the appellants' failure to substantiate their claims with credible evidence.