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1982 (3) TMI 230 - HC - VAT and Sales Tax
Issues:
Challenge to order of assessment for disallowed deductions under section 5(2)(a)(ii) of the Punjab General Sales Tax Act, 1948 and imposition of penalty under section 10(7) of the Act. Analysis: The petitioner-firm contested the order of assessment dated 31st August, 1971, for the year 1967-68, which disallowed certain deductions claimed under section 5(2)(a)(ii) of the Act for sales made to registered dealers. The grounds for disallowance included lack of clarity in declaration forms, doubts regarding the genuineness of purchasers, and absence of proper documentation for the transactions. The Deputy Excise and Taxation Commissioner and the Sales Tax Tribunal upheld the disallowance and imposed a penalty of Rs. 7,200 on the petitioner-firm under section 10(7) of the Act. The petitioner's counsel argued that the grounds for disallowance were not legally valid, citing previous judgments where similar claims were rejected without sufficient evidence. The counsel emphasized that the declarations submitted should be accepted as prima facie evidence of sales to registered dealers unless there is reliable evidence to doubt their genuineness. The petitioner-firm was not provided with an opportunity to challenge the denial of signatures by two dealers, crucial to the case. Upon examination, the Court found no substantial evidence to prove that the declarations were false or forged. The Court highlighted the importance of upholding the statutory declarations unless concrete evidence suggests otherwise. The Court concluded that the penalty imposed on the petitioner-firm for furnishing incorrect information could not be upheld in the absence of reliable evidence against the declarations. Consequently, the Court set aside the impugned orders disallowing deductions and imposing a penalty, ruling in favor of the petitioner-firm. The petitioner was deemed entitled to the claimed deductions for sales made to the specified dealers, and the penalty was revoked. No costs were awarded in the judgment. In summary, the Court's decision favored the petitioner-firm, emphasizing the importance of statutory declarations and the necessity of concrete evidence to refute their genuineness. The judgment highlighted the lack of substantial evidence against the petitioner's claims and overturned the disallowance of deductions and the penalty imposed under the Act.
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