2000 (11) TMI 1205 - HC - VAT and Sales Tax

Summary

Issues:
Levy of tax under the Central Sales Tax Act on transactions shown as inter-State sale, Burden of proof on the assessee to establish movement of goods not by reason of sale, Appellate authorities' error in the view of law on the burden of proof.

Detailed Analysis:
1. Levy of Tax on Inter-State Sale:
The revision pertains to the assessing officer challenging the Rajasthan Tax Board's order affirming the Deputy Commissioner's decision to set aside the levy of tax on two transactions totaling Rs. 5,46,974. The assessing officer treated these transactions as inter-State sales, while the assessee declared them as sales outside the state. The dispute also involved the levy of interest and penalty on the tax amount. The assessing officer found that the assessee failed to prove that the movement of goods was not in pursuance of a sale agreement, leading to the tax imposition.

2. Burden of Proof on the Assessee:
The Deputy Commissioner (Appeals) opined that the letters found during a survey at the business premises were not evidence of a prior sale agreement before the movement of goods. The burden of proving that the movement of goods was not due to a sale rested on the dealer, as per Section 6-A of the Central Sales Tax Act. The appellate authorities erred in not examining the evidence thoroughly and failed to establish the existence of a contract for sale before imposing tax.

3. Appellate Authorities' Error on Burden of Proof:
The High Court found that both the Deputy Commissioner (Appeals) and the Rajasthan Tax Board misconstrued the burden of proof under the law. The burden lay on the assessee to demonstrate that the movement of goods was not due to a sale but a transfer to another place of business. The court emphasized that the burden of proof never shifted to the assessing officer to prove the existence of a sale contract. The court highlighted the importance of thorough examination of evidence to determine the true nature of transactions before imposing tax and penalties.

In conclusion, the High Court allowed the revision, setting aside the previous orders and remanding the case back to the Deputy Commissioner (Appeals) for a fresh decision based on a proper examination of the evidence and reaching an appropriate finding on the nature of the transactions. The court stressed the importance of adhering to the burden of proof requirements under the Central Sales Tax Act for determining tax liability in cases of inter-State transactions.