1983 (1) TMI 221 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner is the last purchaser of manganese ore within the State of Andhra Pradesh.

The judgment of the Court addressed the issue of whether the petitioner, a dealer at Delhi, was the last purchaser of manganese ore within the State of Andhra Pradesh. The petitioner had a permit for exporting manganese ore through M.M.T.C. The department sought to tax the petitioner, alleging that he purchased manganese ore within the State and was liable for sales tax. The petitioner denied being the last purchaser and challenged the tax assessment. The assessing authority, appellate authority, and the Tribunal all concluded that the petitioner was the last purchaser within the State. The petitioner's counsel argued that the Tribunal's conclusion lacked evidence and was arbitrary.

The Court examined the evidence, including correspondence between the petitioner, the Tumsar party, M.M.T.C., and the shipping agent. The Court noted that the mere purchase of manganese ore from the Tumsar party did not establish that the purchase occurred within the State of Andhra Pradesh. The Tribunal based its conclusion on a letter from the petitioner to the shipping agent, indicating the purchase from the Tumsar party. However, the Court found that none of the correspondence suggested that the purchase occurred within the State. The Court emphasized that the department failed to provide evidence supporting the conclusion that the purchase took place within Andhra Pradesh.

The Court rejected the government pleader's argument that the petitioner's failure to produce relevant documents allowed adverse inferences. The Court stated that while the dealer must produce relevant material, the burden of proving the taxable event rested with the department. The Court emphasized that the department must show that the taxable event occurred within the State, which required more than the dealer's failure to produce documents. The Court also noted that the Tribunal did not base its finding on the petitioner's failure to produce documents or adverse presumptions, but on correspondence that did not support the conclusion. Therefore, the Court held that the Tribunal's finding lacked evidence, and the petitioner's failure to produce documents did not substitute for the absence of material.

In conclusion, the Court allowed the petition, finding that the Tribunal's conclusion that the petitioner was the last purchaser of manganese ore within the State of Andhra Pradesh was not supported by evidence. The Court emphasized that the burden of proof lay with the department to establish the taxable event, which was not achieved in this case.