1979 (7) TMI 225 - HC - VAT and Sales Tax

Summary

Issues:
- Whether the purchases made by the assessee were second purchases not liable for tax under section 4 of the Tamil Nadu General Sales Tax Act.
- Burden of proof on the dealer to show transactions are not liable to tax under the Act.
- Compliance with rule 26(13) regarding production of bills for goods liable to single point tax.

Analysis:

The judgment pertains to a revision petition filed against an order of the Sales Tax Appellate Tribunal regarding the taxation of purchases made by the assessee. The assessee, a dealer in oil and oilcakes, claimed that purchases of groundnut kernels were second purchases not subject to tax. The assessing authority and the Appellate Assistant Commissioner disagreed with the assessee's claim, leading to an appeal before the Sales Tax Appellate Tribunal.

The key contention was whether the purchases qualified as second purchases under section 4 of the Tamil Nadu General Sales Tax Act. The Tribunal considered the bills produced by the assessee, which indicated that the goods had already suffered tax. It was held that if the payments certified on the bills were false, the tax should be collected from the sellers, not the assessee. Consequently, the turnover in question was deemed not liable for assessment in the assessee's hands.

Regarding the burden of proof, section 10 of the Sales Tax Act places the onus on the dealer to demonstrate that transactions are not taxable. The assessee fulfilled this requirement by producing relevant purchase bills and identifying the sellers. Despite the cancellation of sellers' registrations, as long as the purchases were from registered dealers, the assessee was not liable for tax under section 4.

The judgment also addressed compliance with rule 26(13), which mandates the production of bills for goods subject to single point tax. The court cited a previous decision emphasizing that non-compliance with the rule does not automatically forfeit the right to exemption from tax on second purchases, as long as the transactions are proven to be second sales.

In conclusion, the court upheld the Tribunal's decision to grant the assessee exemption from tax, as the burden of proof was discharged through the production of bills and vouchers indicating tax payment by the sellers. The revision petition was dismissed, and costs were awarded to the respondent.