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TMI Blog1971 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... under the section. The basis for the charge was stated to be: "Admittedly you have purchased castor seeds through your own bought notes from registered dealers whose transactions are not verifiable. As per section 10, the burden of proof that any dealer or any of his transaction is not liable to tax under this Act shall lie on such dealer. Therefore the purchases effected by you have suffered tax already should be proved by you." The contention for the petitioner is that this approach to section 7-A is erroneous, because the circumstances contemplated by that provision did not include the possibility or impossibility of verifiability of the transactions with the dealers from whom the petitioner had purchased. It seems to us that the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be either from a registered dealer or from other person, whether a dealer or not. So far there is no difficulty. But the words that follow in the first part of the section are somewhat vague and indefinite and appear to fall short of the purpose it was apparently intended to serve, viz., to check evasion. The provision can have significance only in respect of taxable transactions in respect of which tax is payable, but by some means the transactions have not been brought to tax or have escaped tax. To apply section 7-A, two further conditions should be satisfied apart from the purpose for which the goods have been purchased, and those are: (1) the sale or purchase of the goods is liable to be taxed under the Act, and (2) the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e points. In respect of these instances, unless the twofold test is satisfied, viz., that the sale or purchase is liable to tax, but nevertheless the tax in respect of which is not payable in the sense of some kind of exemption from tax, as we have just now visualised, there will be no occasion to invoke section 7-A. Merely because a dealer has made purchases from others the particulars of which are not verifiable, that will not in itself be a circumstance to justifiably apply section 7-A. Verifiability of the preceding transactions is not one of the tests or conditions, and will be irrelevant to the scope of section 7-A. It is for these reasons we are of the view that if the purpose of section 7-A is, as obviously it is, to check evasion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be shifted to the petitioner, for which there is no warrant in section 7-A. W.P. Nos. 605, 606, 697 and 909 of 1971 are cases in which purchase tax had been levied on purchases of butter on the ground that the butter was consumed in the manufacture of ghee. Similar tax has also been levied on purchase turnover of ghee involved in consignment sales said to be in other States. We fail to see how this could be done under section 7-A. Butter is taxable to multi-point tax and is levied on the sales. That being the case, we do not understand how purchase tax can also be levied at the purchase point of the sales which were also the subject-matter of charge. If the purchases were made from householders or other persons who are not dealers, even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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