1980 (8) TMI 187 - HC - VAT and Sales Tax

Summary

Issues:
Exemption claim based on sales to other dealers, Revision proceedings under section 20 of the Act, Justifiability of revising the order, Requirement of proof for exemption claim, Remanding the matter for further inquiry.

Analysis:
The judgment pertains to two cases with similar facts where the assessees claimed exemption on turnover related to purchases of copra and watery coconuts sold to other dealers within the State. The Commercial Tax Officer initially granted exemption based on the list of dealers provided by the assessees. However, the Deputy Commissioner of Commercial Taxes initiated revision proceedings, alleging lack of evidence that the goods were sold to registered dealers who paid tax, deeming the assessees as the last purchasers.

The Sales Tax Appellate Tribunal observed that the revisional authority lacked justification for revising the order, as no material supported the initiation of revisional powers. The Tribunal emphasized the need for concrete evidence to establish that the goods were indeed sold to other dealers who paid tax, stating that the assessing authority failed to verify the authenticity of the claim before granting exemption. Consequently, the Tribunal remanded the matter for a thorough reevaluation by the assessing authority.

In the revision petition, the counsel argued against the remand, asserting that the assessing authority had accepted the list of dealers and other evidence provided by the assessees, granting the exemption initially. It was highlighted that the Deputy Commissioner's reasoning, based on the absence of proof that sales were made to registered dealers who paid tax, was flawed. The judgment clarified that to disprove the assessees as last purchasers, it was sufficient to demonstrate sales to other dealers, without the need to establish the buyers as registered dealers or prove tax payment.

The Court found the Deputy Commissioner's rationale untenable, as the sales to other dealers were not disputed, and the lack of evidence regarding tax payment by buyers did not automatically make the assessees the last purchasers. Consequently, the Tribunal's decision to remand the case for further inquiry was deemed incorrect. The Court allowed the appeals, setting aside the Deputy Commissioner's orders in both cases.

In conclusion, the Court held that the Tribunal should have allowed the appeals, as the Deputy Commissioner's reasoning for deeming the assessees as last purchasers was flawed. The judgment in both cases was in favor of the assessees, with no costs imposed.