1993 (3) TMI 346 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Eligibility for an exemption certificate under Notification No. 1177 F.T. dated March 31, 1983.
2. Validity and genuineness of purchase vouchers for plant and machinery.
3. Existence and identity of the selling dealer, Messrs. Flora Enterprise.
4. Compliance with the principles of natural justice.

Detailed Analysis:

1. Eligibility for an exemption certificate under Notification No. 1177 F.T. dated March 31, 1983:
The applicant, a small-scale industrial unit, sought an eligibility certificate for tax exemption under the specified notification. The Assistant Commissioner rejected the application, questioning the genuineness of the purchase vouchers for machinery, which were essential for establishing eligibility under the notification.

2. Validity and genuineness of purchase vouchers for plant and machinery:
The applicant claimed to have purchased machinery worth Rs. 3,09,096 from Messrs. Flora Enterprise. The Assistant Commissioner found the purchase vouchers spurious, concluding that substantial portions of the machinery were not acquired in accordance with the notification. The applicant contended that the machinery was purchased genuinely, with payments made through a bank by account payee instruments, and that the existence of the machinery in the unit proved the genuineness of the purchase.

3. Existence and identity of the selling dealer, Messrs. Flora Enterprise:
The Assistant Commissioner's enquiry revealed no existence of Messrs. Flora Enterprise at the given addresses, and the registration number provided was found to belong to a different entity. The applicant argued that the selling dealer was in existence at the time of the transaction and that the bank had verified the dealer's bona fides before making payments. The applicant further asserted that he should not be held responsible for the dealer's subsequent disappearance or for any false registration number provided by the dealer.

4. Compliance with the principles of natural justice:
The Tribunal noted that the Assistant Commissioner did not provide the applicant an opportunity to counter the findings of the enquiry report, which questioned the existence of the selling dealer. The Tribunal emphasized that the principles of natural justice were not followed, as the applicant was not heard before the adverse findings were used against him.

Conclusion and Directions:
The Tribunal set aside the order of the Assistant Commissioner dated August 1, 1990, and remanded the matter back for fresh disposal. The Assistant Commissioner was directed to verify the facts related to the bank payments and to conduct a thorough investigation. The Tribunal stressed the need for compliance with natural justice principles, ensuring the applicant is given an opportunity to be heard. The matter was to be disposed of preferably within four months, and the interim order would continue until the final disposal. The application was disposed of with no order for costs.