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1987 (8) TMI 418 - HC - VAT and Sales Tax
Issues:
1. Whether the transaction in question relates to the applicant-firm and involves suppression of purchase account. 2. Whether the Additional Sales Tax Tribunal was justified in enhancing the gross turnover and taxable turnover, resulting in extra tax demand. Analysis: 1. The case involved a registered dealer conducting business in Dhadrak town. During a visit by Sales Tax Department officers to another business premises, a chit was found with an entry dated 18th May, 1973, in the name of the dealer's proprietor. The partner of that business confirmed the entry related to the dealer. The dealer admitted part of the transaction but denied the other part. Despite the explanation, the assessing authorities concluded that the transaction on the credit side also related to purchases made by the dealer, leading to a demand for an increase in the gross turnover and taxable turnover by Rs. 60,000. The dealer's appeals were unsuccessful until a reference was made to the High Court. The second appellate order extensively discussed the matter and found against the dealer. 2. The dealer's counsel argued that the authorities erred in rejecting the explanation and failed to establish that the transaction, even if accepted, was related to the dealer's purchases. The counsel cited a Supreme Court decision but the High Court found it inapplicable to the case. The High Court determined that the findings of the Tribunal and lower authorities were factual inferences and did not raise any legal questions. The observations made in favor of the dealer by the Member in the order of reference were deemed to be wrongly appreciated. Therefore, the High Court held that the first question raised in the reference was unjustified, rendering the reference misconceived. Once the fact of purchase suppression was accepted, the subsequent enhancement of turnovers was deemed justified, with no legal question arising from the order. Decision: The High Court discharged the reference and dismissed the application without costs.
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