2000 (2) TMI 799 - HC - VAT and Sales Tax

Summary

Issues:
- Dispute over exemption claim for sales turnovers of M.S. rounds purchased from National Steel Trading Corporation as second sales for the assessment year 1992-93.
- Interpretation of statutory provisions regarding dealer registration renewal under section 14(5) of the Act.
- Burden of proof on the assessee to establish purchase from a registered dealer for claiming exemption.

Analysis:
1. The dispute in this case revolves around the entitlement of the assessee to claim exemption for sales turnovers of M.S. rounds purchased from National Steel Trading Corporation as second sales for the assessment year 1992-93 under the Kerala General Sales Tax Act, 1963. The assessing authority and the first appellate authority held that the assessee was not entitled to the exemption due to National Steel Trading Corporation not being a registered dealer under the Act from 1989-90 onwards.

2. The Kerala Sales Tax Appellate Tribunal referred to documents and found that the Revenue had not established that the said concern was not a registered dealer or that its registration had been cancelled. The Tribunal considered factual aspects and documents like the invoice and Certificate of Registration to conclude that National Steel Trading Corporation was a registered dealer.

3. The crux of the issue lies in the interpretation of section 14(5) of the Act, which mandates that a dealer's certificate of registration shall be renewed annually for it to remain valid. The Revenue contended that without renewal, a dealer ceases to be registered. On the other hand, the assessee argued that the seller was registered at the time of purchase, and subsequent cancellation should not affect the claim for exemption.

4. The burden of proof to establish purchase from a registered dealer for claiming exemption falls on the assessee. In this case, the Tribunal found that the assessee failed to discharge this burden as there was no evidence to show that the seller was registered beyond 1989-90. The absence of proof of renewal for the year in question, 1992-93, led to the rejection of the exemption claim by the Tribunal.

5. The judgment emphasizes that the renewal of registration is an annual requirement, and the assessee must prove that the seller was a registered dealer at the time of the transaction. Since the assessee could not establish this crucial fact, the Tribunal's decision to disallow the exemption claim was upheld, and the revision application by the Revenue was allowed.

In conclusion, the judgment clarifies the importance of timely renewal of dealer registration for claiming exemptions under the Act and underscores the burden on the assessee to provide sufficient evidence of purchase from a registered dealer to avail such benefits.