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TMI Blog1976 (3) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... sales of vegetable oils, vanaspati and kerosene. The assessing officer included the turnover of sales disclosed in the anamath accounts also in the gross turnover determined by him in both the assessment years, overruling the objection of the assessee that they are all second sales, not liable to tax under the Tamil Nadu General Sales Tax Act. In the appeals preferred by the assessee, the Appellate Assistant Commissioner confirmed this addition disclosed in the anamath accounts holding that there was no proof as to the bona fides of the names of the various persons in this State from whom the petitioner is said to have purchased the oil and made the second sale. The Appellate Assistant Commissioner also pointed out that in the absence of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the reason that if really the petitioner had purchased from the local dealers and the sales were second sales, they would be exempt from payment of sales tax and it was not necessary for the petitioner to have made these entries in the anamath accounts and he could have disclosed the same to the assessing authorities. The Tribunal in rejecting the contention of the petitioner that the sales turnover disclosed in the anamath accounts are second sales of vegetable oil and, therefore, not liable to tax, relied on the decision of its earlier order in the case of dealers where it had held that they are not the first sales. The Tribunal also pointed out that the burden of proving that the petitioner is not the first seller of oil in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee claims exemption from tax on the ground that his sales are second sales, he is bound to show that there was an earlier taxable sale though it was not necessary for the assessee to prove that the earlier sale had actually suffered tax. This was also the view expressed in Imperium Traders v. State of Madras[1975] 36 S.T.C. 6. The learned counsel relied on an unreported judgment in T. C. Nos. 295 and 296 of 1964 dated 10th July, 1967, in support of his contention that it is for the department to show that the sale effected by him is a taxable sale and not a second sale. We are unable to agree that that decision in any way helps the learned counsel. The ratio of the judgment, in our opinion, is that in order to make a transaction lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable earlier sale. In order to determine this issue, the order of the Tribunal is set aside and it is remanded. The petitioner will be permitted to adduce such further evidence as he may consider necessary. We accordingly allow the tax revision cases, set aside the order of the Tribunal and remand the matter to the Tribunal for fresh consideration. There will be no order as to costs. Cases remanded. Appendix [The judgment of the Division Bench of the Madras High Court consisting of VEERASWAMI and RAMAPRASADA RAO, JJ., in Mehaboob and Company v. Government of Madras (Tax Cases Nos. 295 and 296 of 1964Revisions Nos. 205 and 206) delivered on 10th July, 1967, is printed below: ] MEHABOOB AND COMPANY V. GOVERNMENT OF MADRAS The ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that though a certain amount of latitude is given and discretion plays a part, the exercise of the discretion is an act of judgment which should necessarily be based on some materials at least. Simply because a certain material is relied on which justifies estimate of the turnover on a particular amount, it does not follow that on probabilities turnover might have escaped assessment. If that principle is uniformly applied, the danger involved cannot be overstated. In applying best judgment, the estimate should closely follow the material and it is only where there are factors and circumstances which show that there has been evasion, a further estimate on that account may be called for. The Tribunal referred to some material which justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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