2002 (1) TMI 1280 - HC - VAT and Sales Tax

Summary

Issues:
1. Levy of turnover tax on the petitioner for the assessment year 1988-89.
2. Dispute regarding exemption from turnover tax under Government Notification S.R.O. No. 717/88.
3. Burden of proof for claiming exemption under the notification.

Issue 1: Levy of turnover tax
The petitioner, a dealer in arecanut, was assessed for the year 1988-89 by the Sales Tax Officer, who levied turnover tax on the petitioner as no declaration for exemption was produced. However, as per S.R.O. No. 717/88, turnover tax exemption is granted except for the purchase preceding the last purchase. Since the petitioner is not the penultimate purchaser, the levy of turnover tax was deemed illegal.

Issue 2: Dispute regarding exemption
The petitioner was assessed as the last purchaser of arecanut, but the authorities contended that the petitioner should pay turnover tax due to the absence of the necessary declaration for exemption. The Appellate Tribunal acknowledged that the petitioner had paid tax under the Kerala General Sales Tax Act, but held that without the required declaration, the turnover tax was justified. The Tribunal's decision was based on the condition in S.R.O. No. 717/88 that dealers must produce a declaration to avail of the exemption.

Issue 3: Burden of proof for claiming exemption
The notification S.R.O. No. 717/88 mandates dealers to produce a declaration to claim exemption from turnover tax. The burden of proof for claiming exemption was discussed in previous court decisions, emphasizing the necessity of fulfilling conditions for exemption. The court allowed dealers to provide alternative evidence if producing the declaration was challenging. The Tribunal found that the petitioner was the last purchaser of arecanut and had paid tax, indicating that the burden of proof had been met. Consequently, the Appellate Tribunal's decision to levy turnover tax was overturned, and the petitioner was exempted from paying the tax.

In conclusion, the High Court ruled in favor of the revision petitioner, setting aside the Appellate Tribunal's decision and allowing the exemption from turnover tax on arecanut. The judgment highlighted the importance of fulfilling conditions for exemption as per the relevant notification and clarified the burden of proof required for claiming such exemptions.