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TMI Blog1971 (9) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... facts. M/s. Devinder Kumar Kewal Kumar deal in sugar and vegetable ghee on wholesale basis at Ludhiana, and are registered dealers under the Act. For the assessment year 1955-56, the assessing authority assessed the dealers to sales tax at Rs. 56,013-4-3 on enhancing the turnover of the assessee from the returned one of Rs. 18,84,573-0-9 to Rs. 24,00,000. Sales in favour of alleged registered dealers for which deductions were claimed by the assessee were disallowed holding that these transactions were not genuine and none of the concerns was in fact in existence at the relevant time. The following are the dealers to whom sales had been made against declaration in form S.T. XXII: (1) M/s. Ganesh Dass Siri Ram, Ludhiana (Lud. Ill-7934). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firms of Gurgaon, Ambala, Hoshiarpur and Moga or their disposal. Sales were shown to have been made to the above-mentioned alleged purchasers either on all days within a period or on alternate days and the frequency of the sales created grave doubts about the genuineness of these transactions. It was noticed by the assessing authority from the account books that the sales made to purchasers other than the above-mentioned parties were of smaller amount, whereas the sales shown against the names of the afore-mentioned parties ran four or five figures and were made near about the close of the day. (iii) The assessee had expressed his inability to produce these purchasers or their account books before the assessing authority. He and his couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y offered to the petitioner by the assessing authority to produce or summon them through process of law was refused on the plea that their whereabouts were not known. At the time of hearing of the revision petition before (sic) the counsel for the State to summon the above seven dealers but that too was declined on the same plea. The learned counsel for the petitioner stated before the Financial Commissioner that the whereabouts of the owners of the concerns were not known and it was impossible to produce them directly or through process of law. The sole question to be determined, therefore, is whether the evidence, as pointed out by the Tribunal, can be considered to be legal evidence on which a reasonable conclusion to the effect that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 5(2) of the Act is that the sale of goods must be to a registered dealer. It will be preposterous to suggest that the assessing authorities could deprive a dealer of the benefit of deductions by subsequently cancelling the registration certificate of a purchasing dealer after the period to which the deduction relates. Nor can by reason of such cancellation it be held that the dealers were not in existence at the time when the transactions in dispute took place, when we actually find that the purchasers were in possession of valid registration certificates. It is of course open to the assessing authority to come to a conclusion on proper evidence that the transactions were not genuine but no such finding can be reached from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spicions in the mind of the assessing authority or finding may be based on the personal knowledge of such authority, but suspicions, however strong, cannot take the place of proof nor the personal knowledge of the assessing authority can be imported without the same being put to the assessee. It may be true that payments for such sales are usually made by bills of exchange or cheques but it cannot be laid down as a rule of law that sales could in no case be made on cash payment. It is equally difficult to hold that it is for the assessee to prove how goods were transported after purchase by the dealers. As Shamsher Bahadur, J., who delivered the judgment of the court in Ram Pal's case[1968] 22 S.T.C. 79. observed, "the Act only requires tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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