1998 (8) TMI 574 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty under section 45-A(b) of the Kerala General Sales Tax Act for non-maintenance of true and complete accounts.
2. Discrepancy in stock of raw rubber found during inspection.
3. Burden of proof on the petitioner to establish ownership of excess stock.
4. Failure to provide acceptable material or proof to counter the department's findings.
5. Application of legal precedents in burden of proof and evidentiary standards.

Analysis:

1. The petitioner, a dealer in rubber, was penalized under section 45-A(b) of the Kerala General Sales Tax Act for not maintaining true and complete accounts. The penalty was imposed after discrepancies were found during an inspection of the petitioner's business premises, specifically in the stock of raw rubber and scrap rubber.

2. The main issue revolved around the excess stock of raw rubber, which the petitioner claimed belonged to 8 parties. The petitioner provided explanations and affidavits to support their claim, but the authorities found the evidence to be insufficient and raised doubts about the ownership of the excess stock.

3. The burden of proof was on the petitioner to establish that the excess stock did not belong to them. Despite the petitioner's contentions and evidence, including purchase bills and affidavits, the authorities were not convinced of the ownership claims due to inconsistencies and delays in providing relevant information.

4. The court highlighted the importance of providing acceptable material or proof to counter the department's findings. In this case, the petitioner failed to adequately explain the discrepancies and ownership of the excess stock, leading to the conclusion that the burden of proof was not discharged satisfactorily.

5. Legal precedents, such as the Division Bench's ruling on burden of proof and evidentiary standards, were cited to emphasize the requirement for a rational connection between the facts proved and the ultimate facts presumed. The court also referred to a Supreme Court decision regarding the acceptance of affidavits and the consequences of failing to provide contradictory evidence.

In conclusion, the court dismissed the original petition, upholding the imposition of the penalty for non-maintenance of correct and complete accounts. The judgment underscored the importance of meeting evidentiary standards and discharging the burden of proof in cases involving discrepancies or ownership disputes related to stock or assets.