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TMI Blog1984 (6) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... e the first purchasers in the State. In support of his contention he also produced declaration in form 32. The assessing authority made some enquiry with the sellers who issued those declarations in form 32. It was in the enquiry revealed that groundnuts of the value of Rs. 4,45,152.00 were purchased by the assessee from the turnover relating to inter-State transactions. Accordingly the assessing authority held that the petitioner is the first purchaser to that extent liable to pay tax under section 5(4) of the Act. It may be stated that groundnuts and oil-seeds are declared goods in the Fourth Schedule. The tax in respect of the goods would be on the purchase by the first or the earliest of the successive dealers in the State. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Deputy Commissioner of Commercial Taxes (Appeals), who dismissed the same. His second appeal to the Karnataka Appellate Tribunal was also dismissed. The question urged before the authorities below and reiterated before us is that form 32 is conclusive in the matter of treating the petitioner as a first dealer and the petitioner has no other means to verify whether the goods purchased from the sellers had suffered tax or not. If form 32 has been misused by such sellers for evading their tax liability although they are the first sellers in respect of those goods, the taxation authority upon verification must take appropriate action against them and not to recover tax from a person who is not liable to pay under the Act. The dealers who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be only on the first purchase. In the instant case, it is no doubt true that the assessee has produced form 32 issued by the dealers registered under the Act. But, it is well-established that mere production of form 32 does not absolve the assessee from the liability to pay tax if he is the first purchaser. It is also equally well-established that the assessee need not prove that his seller has, in fact, paid the tax as the first seller. In Govindan Co. v. State of Tamil Nadu [1975] 35 STC 50, the Madras High Court observed that to claim the benefit of tax on the ground that the sales effected by the assessee are second sales, the assessee need not show that his sellers have, in fact, paid tax. It is enough for the assessee to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en is on the assessee to prove that he is not liable to tax. He cannot discharge that burden by merely producing form 32 which was passed on to him by his sellers. He must produce some other acceptable evidence to lend credence to the contention that he has purchased the goods from a dealer who is liable to pay tax under the Act. If once the evidence is put on record, then it is a question of appreciation and comparing the evidence of the assessee with the evidence produced by the sellers or collected in accordance with law by the assessing officer from the sellers. If an assessee has produced acceptable evidence in addition to form 32 to show that he has purchased the goods from a person who is liable to pay tax, it would be proper for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except form 32. We have earlier pointed out that the assessee had also produced purchase bills which ought to have been properly scrutinised by the authorities. If the declarations in form 32 have been misused by those selling dealers, the assessing officer should promptly initiate proceedings under the Act and the Rules to take action against such sellers. In the result this revision petition is allowed and the assessment order as affirmed by the Appellate Tribunal so far as it relates to the levy of tax on purchase turnover of groundnuts is quashed. The assessing officer shall give an opportunity to the assessee to produce evidence and redo the assessment in accordance with law and in the light of the observations made. The assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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