9911796707
TMI Blog2024 (11) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... THE SECRETARY, TAMILNADU SALES TAX APPELLATE TRIBUNAL (MB) , CHENNAI, THE DEPUTY COMMERCIAL TAX OFFICER, PANRUTI (RURAL). [ 2024 (8) TMI 1485 - MADRAS HIGH COURT] where the dealer was not able to prove the factum of first sale to claim the exemption on the ground of second sale, as the burden of proof was on the assessee to prove the transaction. Further, in A.S.Ganapathy Chettiar Vs. The State of Tamil Nadu [ 1976 (3) TMI 209 - MADRAS HIGH COURT] , relied on by the learned Government Advocate for the appellant, the Division Bench of this Court has held that the burden of proving that there was an earlier taxable sale was on the assessee. In view of the above decisions and the fact that the respondent dealer had failed to prove the transaction of the factum of first sale, the first question of law is answered in favour of the revenue and against the assessee. Whether the deletion of the consequential penalty under Section 12(5)(iii) by the Tribunal is legally tenable? - HELD THAT:- In the instant case, the respondent had put forth a claim of second sales and further they submitted the documents, which on enquiry were found to be bogus and fictitious and the respondent had made no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under the Act for the assessment year 1982-83 by rejecting the claim of second sales in respect of the purchases made from those 5 firms. 4 . Since the return was not filed, penalty was also levied under Section 12(5) of the Act. The assessee preferred an appeal before the Appellate Assistant Commissioner (CT)-I in A.P.No.424/87 and by order dated 02.08.1989, the appeal came to be dismissed confirming the assessment by observing that the exemption claimed on the purchases which are made from spurious dealers cannot be accepted. 5 . Assailing the same, the assessee had preferred Second Appeal before the Tamil Nadu Sales Tax Appellate Tribunal in Tribunal Appeal No.46 of 1990. However, the Appellate Tribunal, by order dated 07.08.1991, allowed the appeal on the ground that since the entire purchases were effected from registered dealers, the sales at the hands of the appellant are eligible for exemption. Further, the Tribunal also observed that the Assessing Officer had merely called for a report from various assessment circles and there was no detailed report after enquiry. Challenging the orders passed in the Second Appeal, the Revenue had preferred the above Tax Case. 6 . Mr.V.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the TNGST noted in the bills are all bogus ones in the name of non-existing bogus dealers. 13 . As there was no proof that the purchases made from those parties suffered tax at an earlier stage, the Assessing Officer passed an order of assessment dated 17.08.1987 by rejecting the claim of second sale and brought all those purchases to tax. The total turnover for the assessment year 1982-83 was determined to Rs.78,10,319.64 and the same was assessed for tax at 4% single point to the tune of Rs.1,40,464/-. 14 . In the appeal preferred by the assessee, appellate authority took note of the fact that the assessee has not filed any documents to prove that the purchases were made from genuine dealers other than the purchase bills and the accounts maintained by them. Further, on verification and enquiry, it was found that the alleged sellers itself are bogus dealers in which some other registration numbers of dealers have been created in fictitious names. As such by relying on the decision of STAT in T.A.No.1785/84 dated 12.03.1987, which was passed by following the decision of the Andhra Pradesh High Court in 62 STC 71, wherein it was held that the person claiming the exemption under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated to have effected sales to the petitioner. Moreover, the enquiry conducted by the respondents has established that the dealer registration numbers furnished by the petitioner belonged to other registered dealers and not the entities named as sellers by the petitioner. 12 . In the aforesaid circumstances, the provisions of Section 10 of the Act stand attracted. Section 10(1) of the Act reads thus: Section 10. Burden of proof: (1) For the purpose of assessment of tax under this Act the burden of proving that any transaction or any turnover of a dealer is not liable to tax shall lie on such dealer. 13 . The burden of proving a transaction falls upon the entity making the claim in respect of that transaction and thus, the onus of establishing a claim of second sales falls solely upon the dealer making such claim. Section 10(2) specifically states that Notwithstanding anything contained in this Act or in any other law for the time being in force, a dealer in any of the goods liable to tax in respect of the first sale or first purchase in the State shall be deemed to be the first seller or first purchaser as the case may be of such goods and shall be liable to pay tax accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that their sales are second sales are bound to show that there has been an anterior taxable sale and that they need not prove that tax had in fact been paid on those anterior sales. To claim the benefit of tax on the ground that their sales are second sales, the petitioners need not show that their sellers have in fact paid tax and it is enough for them to show that the earlier sales are taxable sales and that the tax is really payable by their sellers. Therefore, the direction given by the Tribunal that the petitioners are to show that the tax has been paid by their sellers on the iron and steel goods sold by them to the petitioners does not appear to be correct. 18 . The petitioner relies on the finding that 'to claim the benefit of tax on the ground that their sales are second sales, the petitioners need not show that their sellers have in fact paid tax and it is enough for them to show that the earlier sales are taxable sales and that the tax is really payable by their sellers'. 19 . The above finding does not, in our view, advance the case of the petitioner. What has been held is that, in order to establish an anterior sale for claiming second sales exemption, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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 liable, it must be proved to be a sale and if once it is proved to be a sale, it is for the assessee to prove that that sale is exempt because every transaction of sale is liable to tax under Section 3(1) of the Tamil Nadu General Sales Tax Act. We are, therefore, of the opinion that the burden of proving that there was an earlier taxable sale was on the assessee. 20 . In view of the above decisions and the fact that the respondent dealer had failed to prove the transaction of the factum of first sale, the first question of law is answered in favour of the revenue and against the assessee. 21 . In so far as the levy of penalty, the Tribunal had set aside the penalty levied under Section 12(5)(iii) of the Act on the ground that the entire turnover is not liable for tax at the hands of the respondent as they are only second sales and therefore, the question of filing return does not arise and in the absence of any obligations to file return, there cannot be any levy of penalty. 22 . In the instant case, the respondent had put forth a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
