1987 (6) TMI 375 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the turnover of Rs. 70,000 based on loose papers was an evaded sale and related to the individual transaction of a partner or the firm.
2. Whether the evaded turnover of Rs. 1,84,756 related to the sale of 988 tins of ghee to Ramdas.
3. Whether the evaded turnover of Rs. 30,000 based on previous sales in khatas was rightly set aside.
4. Whether the penalty of Rs. 16,000 under section 16(1)(i) was rightly set aside.

Detailed Analysis:

1. Turnover of Rs. 70,000 Based on Loose Papers:
The Board of Revenue referred the question to the High Court whether the turnover of Rs. 70,000 fixed on the basis of loose papers found in the business place was an evaded sale and whether a partner of the firm could carry out separate business from the same premises as a commission agent without a valid license. The High Court found that the sales of Rs. 70,000 were transactions entered into by an individual partner as an agent for various agriculturists, and the assessee was acting as a commission agent. Under section 9-B of the Act, a commission agent is liable for tax only if the principal is assessable to tax. Since there was no evidence that the turnover of any principal exceeded Rs. 30,000, no tax liability could be imposed on the assessee.

2. Evaded Turnover of Rs. 1,84,756 Related to Sale of 988 Tins of Ghee:
The Board of Revenue found that the onus to prove the sales which escaped tax lay on the department. The assessing authority failed to discharge this onus properly. The statement of Ramdas indicated that no purchases were made by him from the assessee, and he denied that the entries related to any sale to him. This finding was based on evidence and affirmed by the Division Bench of the Board of Revenue. The High Court agreed that this was a finding of fact with no legal infirmity.

3. Evaded Turnover of Rs. 30,000 Based on Previous Sales in Khatas:
The Board of Revenue held that the sales were determined on mere surmises and conjectures and that the essential element of sale had not been established by the assessing authority. This was also a finding of fact, and the High Court found no legal infirmity in this finding.

4. Penalty of Rs. 16,000 Under Section 16(1)(i):
The High Court did not specifically address the penalty of Rs. 16,000 under section 16(1)(i) in detail, as the primary focus was on the turnover and sales issues.

Conclusion:
The High Court dismissed the revision petition, upholding the Board of Revenue's findings. The turnover of Rs. 70,000 related to sales by the assessee as a commission agent for agriculturists, and no tax liability could be imposed due to lack of evidence that any principal's turnover exceeded Rs. 30,000. The findings regarding the evaded turnovers of Rs. 1,84,756 and Rs. 30,000 were based on facts and did not involve any legal infirmity. The petition was dismissed without any order as to costs.