2007 (9) TMI 284 - HC - VAT and Sales Tax

Clandestine removal - Proof - Held that - It appears that the alleged transactions of the booking register have been connected with the applicant merely on surmises and conjuncture without any specific material in this regard. It is settled principle of law that in case, if the Revenue wants to rely upon the entries of the document seized from the premises of third party, the burden lies upon the Revenue Authority to prove the genuineness and authenticity of the said entry and to connect the said entry with the dealer, in case, if the dealer denies to have any connection with such entry. In the present case, Revenue has failed to prove that such entries are related to the present applicant. In the circumstances, the view taken by the Tribunal and the authorities below connecting the entries of the booking register with the applicant is merely based on surmises and conjuncture. In the result, revision is allowed. The order of the Tribunal is set aside and the applicant is declared non-taxable under the Central Sales Tax Act.

Summary

Issues:
Assessment under Central Sales Tax Act based on seized booking register entries.

Analysis:
The case involves a revision under Section 11 of the U.P. Trade Tax Act against an order of the Tribunal regarding the assessment year 2001-2002. The applicant, a registered dealer, was assessed to tax under the Central Sales Tax Act based on entries in a booking register seized from a transporter. The assessing authority linked 55 transactions in the register to the applicant, despite the lack of specific details connecting them. The applicant denied any involvement in these transactions, stating there were multiple firms with similar names in the area. The Joint Commissioner (Appeals) allowed an appeal, directing cross-examination of the transporter's representative, who did not confirm the transactions' link to the applicant. Despite this, the assessing authority upheld the tax assessment, a decision affirmed in subsequent appeals.

The applicant argued that the assessment was made on presumption, lacking concrete evidence connecting the entries to them. The High Court noted that the booking register lacked crucial details like addresses and relevant documents were not produced. The transporter's representative did not acknowledge the applicant's involvement, highlighting the lack of evidence. The court emphasized that if revenue relies on seized documents, they must prove their authenticity and connection to the dealer. In this case, the revenue failed to establish the entries' relation to the applicant, basing the assessment on conjecture. The court cited a legal precedent supporting the burden of proof on the revenue in such cases. Consequently, the court allowed the revision, declaring the applicant non-taxable under the Central Sales Tax Act, overturning the Tribunal's order.