1996 (7) TMI 516 - HC - VAT and Sales Tax

Summary

Issues:
1. Withdrawal of exemption on the ground of cancelled registration certificate.
2. Identifiability of the dealer after cancellation of registration.
3. Validity of exemption based on purchases from identifiable dealers.
4. Burden of proof on the assessee to show purchases were made.

Analysis:

1. The judgment deals with the withdrawal of exemption granted to the respondent-assessee on the basis of second sales under the Andhra Pradesh General Sales Tax Act, 1957 for the assessment year 1981-82. The assessing authority withdrew the exemption citing the first seller's (M/s. Sri Veera Venkata Satyanarayana Rice and Oil Merchants) cancelled registration certificate as grounds for withdrawal, a decision upheld by the Appellate Deputy Commissioner and challenged by the State in revision.

2. The State contended that the cancelled registration made the dealer unidentifiable, justifying the withdrawal of exemption. However, the Court disagreed, stating that cancellation of registration does not render the dealer unidentifiable. Reference was made to a previous judgment emphasizing that if the vendors are real and identifiable, exemption cannot be withdrawn solely based on registration cancellation unless the dealers are found to be fictitious and unidentifiable.

3. Another case cited by the State involved fictitious dealers with non-existent names and addresses, leading to the denial of exemption. The Court distinguished this case by highlighting that the situation in the present case was different, as the dealer in question was real and identifiable. The judgment clarified that the cancellation of registration does not equate to the dealer being non-existent if they are genuine and identifiable.

4. The Court addressed the burden of proof on the assessee to demonstrate the purchases made. While the State argued that the burden was on the assessee, the Court noted that the Tribunal found the department did not dispute the authenticity of the bills issued by the first seller. The respondent-assessee provided purchase invoices and way bills showing the goods were transported, thereby meeting the burden of proving purchases from an identifiable dealer.

5. Ultimately, the Court found no merit in the tax revision case and dismissed it, emphasizing that the appellant had successfully demonstrated the purchases made from an identifiable dealer, thereby upholding the exemption granted to the respondent-assessee.