1983 (4) TMI 250 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the assessee is entitled to exemption from tax on the ground that he is the second seller of groundnut oil.
2. Whether the first sellers from whom the assessee purchased groundnut oil were real and identifiable dealers within the State.
3. Whether the non-payment of tax by the first seller shifts the liability to the second seller.
4. Whether the Tribunal correctly applied the tests laid down in T.R.C. No. 17 of 1978.

Summary:

Issue 1: Entitlement to Exemption
The assessee claimed exemption on the turnover of groundnut oil, asserting he was the second seller within Andhra Pradesh. The assessing authority initially granted this exemption, but the Deputy Commissioner revised the order, stating that certain dealers from whom the assessee claimed to have purchased were fictitious and the alleged first sales were not subjected to tax. The Tribunal, upon appeal, verified the records and granted relief for purchases made from real and identifiable sellers within the State.

Issue 2: Real and Identifiable Dealers
The Tribunal applied two tests to determine the exemption: (1) the first seller should be a real and identifiable dealer within the State, and (2) mere non-payment of tax by the first seller does not shift the liability to the second seller. The Tribunal found that some dealers were real and identifiable, granting exemption, while others were not, disallowing the exemption. The Tribunal's verification process included checking registration numbers mentioned in the bills.

Issue 3: Non-payment of Tax by First Seller
The Tribunal held that non-payment of tax by the first seller does not shift the liability to the second seller. This principle was upheld in the case of B. Rajendra Oil Mills Refinery v. State of Andhra Pradesh, where the Tribunal found that the registration numbers of certain dealers did not belong to them, and the way bills produced by the assessee were also found to be false.

Issue 4: Application of Tests from T.R.C. No. 17 of 1978
The Tribunal correctly applied the tests from T.R.C. No. 17 of 1978, verifying the facts and granting appropriate relief. Both the department's and the assessee's T.R.Cs. were dismissed as the Tribunal had applied the correct tests and assessed the facts appropriately.

Conclusion:
The T.R.C. is dismissed. No costs. Advocate's fee Rs. 150. The judgment emphasizes the importance of proving that the first seller is a real and identifiable dealer and that non-payment of tax by the first seller does not shift the tax liability to the second seller.