2011 (2) TMI 1315 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of tax on disclosed turnover, burden of proof on the assessee regarding purchases made within the State of U.P., granting exemption on turnover, interpretation of Section 12A of the U.P. Trade Tax Act.

Analysis:
The case involved a revision against the Tribunal's order for the assessment year 1994-95 concerning the tax assessment on the disclosed turnover of the applicant, who was in the business of motorcycle and scooter parts. The assessing authority levied tax on the disclosed turnover as the sale of imported motor parts since the assessee failed to produce purchase vouchers or appear before the authority. The Deputy Commissioner (Appeal) partially allowed the appeal, considering that some purchases might have been made within the State of U.P. and some from outside. Both the applicant and the Commissioner, Trade Tax, appealed to the Tribunal. The Tribunal granted exemption on the entire disclosed turnover, treating it as sales of U.P. purchased goods, citing lack of evidence of import or use of form XXXI.

The main issue revolved around the burden of proof on the assessee regarding purchases made within the State of U.P. Section 12A of the U.P. Trade Tax Act places the burden on the assessee to prove the origin of purchases related to the disclosed sales. The assessing authority, first appellate authority, and the Tribunal had differing views on the matter, with the Tribunal granting exemption based on the assumption of U.P. purchased goods due to lack of evidence of import or use of form XXXI. However, the High Court held that the burden lay on the assessee to provide particulars of purchases to substantiate claims of sales from within the State of U.P.

The High Court emphasized the importance of evidence and compliance with statutory provisions in tax assessments. It noted that the applicant failed to produce purchase vouchers or establish that the sales were related to goods purchased within the State of U.P. The Court interpreted Section 12A of the Act, highlighting the requirement for the dealer to disclose full particulars of purchases to claim exemption. As the applicant did not fulfill this burden of proof and lacked evidence of import or use of form XXXI, the Tribunal's exemption was deemed erroneous. Consequently, the High Court allowed the revision, setting aside the Tribunal and first appellate authority's orders, and reinstated the assessing authority's order.