1995 (9) TMI 336 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Justification of entry tax imposition due to failure to prove goods were other than local.
2. Entitlement to claim exemption from entry tax under clause (iv) to the first proviso to section 3(1) of the Entry Tax Act.
3. Burden of proof regarding entry tax levied on goods without the required seal on sales bills.

Issue-wise Detailed Analysis:

1. Justification of Entry Tax Imposition:
The Court examined whether the Tribunal was justified in maintaining that entry tax could be imposed because the dealer had not proven that the goods purchased were other than local goods. The Court noted that the petitioners, registered dealers under the M.P. General Sales Tax Act, 1958, were assessed to entry tax despite their contention that the goods were purchased from registered dealers and were not local goods. The Tribunal's decision was affirmed by the appellate authority in M.C.C. No. 454 of 1986.

2. Entitlement to Claim Exemption from Entry Tax:
The Court analyzed whether the Tribunal was justified in holding that the assessee was not entitled to claim exemption from entry tax under clause (iv) to the first proviso to section 3(1) of the Entry Tax Act. The Court discussed the definition of "local goods" and the conditions under which entry tax is levied. It was noted that the relevant proviso exempts goods purchased from registered dealers on which entry tax is payable or paid by the selling registered dealer. The Court emphasized that entry tax is a single point tax and once paid, it is not leviable again when goods move from one local area to another.

3. Burden of Proof Regarding Entry Tax:
The Court considered whether the Tribunal was justified in holding that the burden was upon the assessee to prove that entry tax had been levied on such goods in the hands of the selling registered dealers where no seal required by section 7(1) of the Entry Tax Act was affixed on the sales bills. The Court referred to section 7, which mandates that registered dealers issue a bill with a rubber stamp endorsement indicating that the goods are local and no entry tax has been paid. The Court held that the absence of such an endorsement implies that the goods are not local and the taxable event had already occurred. Thus, the burden of proof shifts to the Revenue to show that the goods are local and the taxable event had not occurred earlier.

Conclusion:
The Court concluded that the Tribunal and authorities were not justified in ignoring the evidentiary value of the non-affixture of the rubber stamp endorsement on the bills. The absence of the endorsement should be given weight, and the burden shifts to the Revenue to prove that the goods are local and the taxable event had not occurred earlier. The Court answered the questions in the negative, in favor of the assessee and against the Revenue, holding that the decision in Renomal Ramesh Kumar v. State of M.P. correctly laid down the law.