2002 (12) TMI 620 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of Tamil Nadu Taxation Special Tribunal regarding shifting levy of tax under Section 7-A of the Tamil Nadu General Sales Tax Act for purchases made by a registered dealer from three selling dealers.

Analysis:
The petitioner, a registered dealer, challenged an order by the Tamil Nadu Taxation Special Tribunal regarding the shifting levy of tax under Section 7-A of the Act for purchases made from three registered dealers for manufacturing Potassium Chlorate. Initially, the Assessing Officer granted exemption on these purchases. However, after inspection, the order was revised, holding the petitioner liable for tax as the selling dealers had not paid tax. The petitioner appealed, and the Joint Commissioner revised the assessment, sharing the liability 50:50. The Special Tribunal confirmed this order, leading to the writ petition.

The petitioner argued that as the purchases were from registered dealers with valid bills, the revenue should collect tax from the selling dealers, not shift the liability. They contended that since the purchases were made with cheques, the Department should collect tax from the selling dealers. Conversely, the Government Pleader stated that the selling dealers were non-existent, and the bills produced were from bogus dealers who did not conduct business. The burden was on the petitioner to prove the selling dealers' genuineness, which they failed to do.

The Court examined the arguments and precedents cited by the petitioner, emphasizing that the selling dealers were found to be non-existent and their addresses bogus. The revenue proved the bills were fake, aligning with previous judgments. The Court dismissed the petitioner's reliance on a specific case, as the facts of the present case contradicted it. The Court upheld the findings of the revenue authorities and Special Tribunal, concluding there was no error in their order.

The petitioner also contested a finding regarding another dealer, Raja Agency, which was deemed unnecessary by the Court. Despite this, the Court found no grounds to interfere with the Special Tribunal's order and dismissed the writ petition without costs.