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TMI Blog1990 (10) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year the assessee had purchased rubber meant to be used for retreading of tyres. The purchase price of the rubber purchased during the year by the assessee was Rs. 22,200. The assessing authority made an assessment under section 12(3) of the Act. The assessing authority found that the rubber purchased by the assessee was utilised for the retreading of the tyres of its customers. Rubber materials were purchased both from outside the State and within the State. On verification, the assessing authority found that the rubber purchased within the State was worth Rs. 22,101.85. It was also found that the purchase was from M/s. Tread Lines, Belgaum, which was an unregistered dealer. On the ground that the rubber was purchased under the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the petitioner had failed to prove that the rubber had suffered tax at the hands of M/s. Tread Lines, Belgaum. Aggrieved by the said order, the petitioner has presented this revision petition. 4.. Sri B.P. Gandhi, learned counsel for the petitioner, urged the following two contentions: (1) The petitioner cannot be regarded as a dealer in rubber, for the reason that the petitioner had purchased the rubber only for the purpose of retreading tyres of its customers and was not for the purpose of manufacturing or producing any other goods for sale. (2) There was no proof that the rubber which the petitioner purchased from M/s. Tread Lines, Belgaum, had not suffered tax at the hands of the seller of the rubber to the petitioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per contra contended that the petitioner does fall within the definition of the word "dealer" as defined in the Act. Elaborating his submission, he stated as follows: The business of the petitioner is retreading of tyres. It is for that purpose the petitioner has been purchasing rubber. Therefore, it is clear that the petitioner is carrying on the business of purchasing rubber without which he cannot carry on his business of tyre retreading. Therefore, if in any given assessment year, it is found that the petitioner had purchased rubber under the circumstances in which no tax was leviable and the petitioner used that rubber for the purpose of retreading of tyres, it would be a case of consuming the goods in a manner otherwise than for manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the petitioner submitted as follows: It is true that the petitioner had purchased rubber from M/s. Tread Lines, Belgaum. It may be that M/s. Tread Lines, Belgaum, was an unregistered dealer. But under the Act they were bound to pay tax and, in fact, they had paid the tax on the rubber which the petitioner had purchased from them. The burden of proving that the rubber purchased by the petitioner had not suffered tax was squarely on the department, but both the authorities proceeded on the basis that the petitioner had failed to discharge the burden of proof, namely, that the goods had suffered tax at the hands of M/s. Tread Lines, Belgaum. Therefore, the orders of the assessing authority as well as of the two appellate au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. In other words, it is only in cases where tax is leviable under the relevant provisions of the Act, but the dealer claims exemption from the same in respect of certain transactions or turnover of his, that he has to establish all the circumstances entitling him to claim such exemption. But, sub-section (1) of section 6-A does not place the burden of proving the ingredients prescribed by the Act to justify levy of tax on the assessee. The burden of proving those ingredients is clearly on the taxing authority. Sri Chandrakantaraj Urs did not dispute this proposition. As the Supreme Court has in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Travancore Rubber and Tea Co. [1967] 20 STC 520 (SC) laid down that in all cases o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellate authorities as also that of the original authority are liable to be set aside and the matter has to be remanded to the assessing authority for making fresh assessment if the department is in a position to prove that the goods in question had not suffered tax at the hands of M/s. Tread Lines, Belgaum, from whom the petitioner had purchased the goods. 11.. Accordingly, we make the following order: (i) The revision petition is allowed. (ii) The assessment order made by the Commercial Tax Officer, II Circle, Belgaum, dated November 15, 1980 (annexure C), the first appellate order of the Deputy Commissioner of Commercial Taxes (Appeals), Belgaum, dated May 25, 1981 (annexure B) and the order of the Karnataka Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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