1995 (9) TMI 334 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Best judgment assessment
2. Reasonable opportunity for the petitioner
3. Suppressed turnover
4. Use of 'C' forms for purchases
5. Burden of proof on the petitioner

Issue-wise Detailed Analysis:

1. Best Judgment Assessment:

The core issue revolves around the best judgment assessment made by the Commercial Tax Officer (CTO) under Section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957. The petitioner, a registered dealer in cement, was found to have made undisclosed purchases of photographic goods worth Rs. 8,38,631.18 using 'C' forms. The CTO, after issuing a show cause notice and receiving no objections from the petitioner, concluded that the petitioner willfully suppressed sales of photographic goods and assessed a turnover of Rs. 10,90,220, including an estimated profit of 30%. The Tribunal later reduced the estimated profit to 15%, bringing the sale value to Rs. 9,64,425.

2. Reasonable Opportunity for the Petitioner:

The petitioner contended that she was not given a reasonable opportunity to present her case. However, the court found this claim unsubstantiated. The petitioner was served with a show cause notice on May 14, 1986, and was given multiple opportunities to respond, including a second notice and a hearing date. Despite this, no objections were filed, and the petitioner was deemed to have avoided appearing before the authorities. The Tribunal and the court held that the petitioner had reasonable and adequate opportunity but failed to avail of it.

3. Suppressed Turnover:

The Tribunal and the court found that the petitioner admitted to purchasing photographic goods but did not disclose these in her books of accounts or returns. The petitioner's claim that the goods were used by her husband in his photo studio was not substantiated with evidence. The authorities concluded that the petitioner sold the goods and suppressed the turnover. The court upheld this finding, noting that the petitioner did not provide any material evidence to support her claim.

4. Use of 'C' Forms for Purchases:

The petitioner used 'C' forms for inter-State purchases of photographic goods, which she was not registered to deal in. This misuse of 'C' forms was a significant factor in the authorities' decision. The court noted that the petitioner was not registered under the Central Sales Tax Act for photographic goods and had no explanation for this discrepancy. The improper use of 'C' forms indicated an intention to evade taxes.

5. Burden of Proof on the Petitioner:

The court emphasized that the burden of proof was on the petitioner to explain how the photographic goods were disposed of. The petitioner failed to provide any credible evidence to support her claim that the goods were used in her husband's photo studio. The court referred to several precedents, including the Supreme Court's decision in Commissioner of Sales Tax v. H.M. Esufali H.M. Abdulali, which established that the burden of proving facts within the dealer's knowledge lies with the dealer. The court found that the petitioner did not meet this burden.

Conclusion:

The court dismissed the tax revision case, concluding that the petitioner was given reasonable opportunity, the best judgment assessment was justified, and the petitioner failed to prove her claims regarding the use of photographic goods. The misuse of 'C' forms and the lack of evidence to support the petitioner's claims led to the upholding of the assessment on the suppressed turnover. The petition was dismissed with no costs.