1986 (8) TMI 432 - HC - VAT and Sales Tax

Summary

Issues:
- Assessment of turnover for the years 1973-74 to 1975-76 based on best judgment assessment.
- Burden of proof on the dealer regarding suppressed turnover.
- Application of section 12-A of the U.P. Sales Tax Act.
- Distinction from previous case law regarding tax imposition without positive finding.
- Judicial interpretation of burden of proof in cases of suppressed sales.
- Sufficiency of evidence and appraisal of evidence in revision filed by the Commissioner of Sales Tax.

Analysis:
The judgment by the High Court of Allahabad pertains to six Sales Tax Revisions arising from a consolidated order passed by the Sales Tax Tribunal. The dealer, who is not a manufacturer and supplies goods to Government hospitals, had not maintained proper accounts for the assessment years 1973-74 to 1975-76. Consequently, best judgment assessment was conducted by the authorities due to the lack of accounting records, leading to a dispute over the determination of turnover for the years in question.

During surveys conducted in 1974 and 1977, significant suppression of turnover was discovered, resulting in an enhancement of taxable turnover for the relevant years. The dealer contended that unless there was positive proof of being an importer for the enhanced turnover, taxation could not be imposed. The court examined the burden of proof under section 12-A of the U.P. Sales Tax Act, emphasizing that the burden lies on the assessee to prove facts within their knowledge.

In distinguishing a previous case, the court noted that in the present matter, the Sales Tax Tribunal had established substantial suppression of sales, making it a case of estimating taxable turnover. The burden of proof was held to rest on the dealer, who failed to discharge it satisfactorily. Citing precedent, the court reiterated that in cases of suppressed sales, the burden of proof lies with the assessee.

Regarding the revisions filed by the Commissioner of Sales Tax, the argument centered on the sufficiency and appraisal of evidence for reducing turnover. The court clarified that such matters cannot be re-evaluated in a revision under section 11 of the U.P. Sales Tax Act. Consequently, the revisions filed by the department were dismissed.

In conclusion, all six revisions were dismissed, with each party bearing their own costs. An interim order from a previous date was automatically vacated, and the petitions were ultimately dismissed.