1980 (9) TMI 240 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner was acting as a broker or conducting business himself in buying and selling groundnut and cotton-seeds.
2. Assessment of liability under the Andhra Pradesh General Sales Tax Act based on account books and slips recovered during a search.
3. Burden of proof regarding tax liability on the petitioner.
4. Determination of the last purchaser in a transaction involving groundnuts.

Detailed Analysis:
1. The primary issue in the case revolved around determining whether the petitioner was merely a broker or engaged in buying and selling activities himself. The Sales Tax Appellate Tribunal reviewed account books and slips recovered during a search and concluded that the petitioner was involved in individual transactions of sale and purchase, rejecting his claim of being a broker for specific factories.

2. The assessment of liability under the Andhra Pradesh General Sales Tax Act was based on the material found in the account books and slips. The assessing authority, after examining the records, held the petitioner liable to pay sales tax and penalty for failing to submit returns and undergo assessment. Subsequent appeals to higher authorities confirmed the assessment, with some relief granted in terms of penalties.

3. The issue of burden of proof regarding tax liability was raised by the petitioner, arguing that the burden lay on the department to prove the transactions were taxable. However, the court rejected this argument, citing precedents that when an assessee fails to satisfactorily prove the nature of cash receipts, authorities can infer assessable income. In this case, the petitioner's failure to establish the brokerage nature of transactions led to the inference of sale and purchase activities.

4. Lastly, the determination of the last purchaser in a groundnut transaction was discussed. The Tribunal held that once a transaction is deemed a purchase, the burden shifts to the petitioner to prove subsequent sales to third parties within the state. As the petitioner failed to provide evidence of being the last purchaser, the Tribunal's decision was upheld.

In conclusion, the High Court dismissed the revision cases, upholding the Tribunal's findings that the petitioner was engaged in sale and purchase transactions rather than acting solely as a broker. The court emphasized the importance of establishing the nature of transactions and fulfilling the burden of proof in tax liability cases.