1984 (3) TMI 355 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the Tribunal was justified in holding that the onus was on the department to prove that the signature on the declaration was not of the purchasing registered dealer or license-holder.
2. The procedure and burden of proof required for claiming deductions under the Bombay Sales Tax Act, 1946.
3. The validity of declarations signed in a regional language when the purchasing dealer usually signed in English.
4. The implications of the absence of specimen signature provisions before 1953.

Issue-wise Detailed Analysis:

1. Onus of Proof:
The primary question referred for determination was whether the Tribunal was justified in holding that the onus was on the department to prove that the signature on the declaration was not of the purchasing registered dealer or license-holder. The Tribunal had sent the case back to the Deputy Commissioner of Sales Tax for a fresh decision regarding the sales to three dealers whose declarations were signed in Multani. The Tribunal held that the assessee should be deemed to have discharged his onus about the identity of the signatory of the declaration if it is signed in a regional language. The department was required to produce evidence to invalidate the declarations if they believed the signatures were not genuine.

2. Procedure and Burden of Proof:
Section 6 of the Act provides for the levy and rates of tax on the taxable turnover, and the rules for determination of the taxable turnover are laid down in sub-section (3). The assessee claimed deductions under rule I(ii) of sub-section (3) of section 6, which allows deductions for sales to a registered dealer if the purchasing dealer certifies the goods for resale. Rule 26 of the Bombay Sales Tax Rules, 1946, outlines the procedure for claiming deductions, requiring the dealer to produce a certificate signed by the purchasing dealer. The court emphasized that mere production of such a certificate is not conclusive proof, and the Sales Tax Officer is entitled to verify the genuineness of the signature if there are reasons to suspect it.

3. Declarations Signed in Regional Language:
The court noted that although the purchasing registered dealers ordinarily signed their names in English, the declarations in question were signed in Multani. The department argued that the burden was on the assessee to prove the genuineness of the signatures. The court held that if the department suspects the authenticity of the signatures, it should verify from its records whether the purchasing dealer had ever signed in the language in question. If discrepancies are found, the officer can call upon the assessee to produce evidence to prove the genuineness of the signatures. The assessee can request inspection of the department's records and provide additional evidence for comparison.

4. Absence of Specimen Signature Provisions Before 1953:
The court acknowledged that provisions for specimen signatures of registered dealers and their nominees were introduced in the Bombay Sales Tax Act, 1953, and later Acts. These provisions were not in existence prior to 1953. Therefore, the court's observations regarding the procedure for verifying signatures are relevant only to cases prior to 1953. The court concluded that the question of burden of proof is essentially procedural when the officer suspects the genuineness of the certificate or the identity of the signatory.

Conclusion:
The question referred to the court was answered in the negative and in favor of the department. The burden of proof and the procedure to be followed when the officer suspects the genuineness of the certificate were outlined. However, due to the absence of relevant records from the period in question, the Tribunal's direction that the claim of the assessee will be allowed if the declarations signed in Multani read as the names of the registered dealers will stand. No order as to costs was made.

← Previous Next →