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TMI Blog2025 (2) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... tative of dealers to depose in his favour - No explanation is offered why he did not avail that facility. To this needs to be added one militant fact that the selling dealers enumerated in the Reassessment Order have not deposited the tax component claimed to have been paid by the Respondent Assessee on its purchase of goods. The goods in question were copper/GI strips, sheets, patties, plates & wires. How such heavy things could have been transported in two-wheelers & three wheelers, remains to be a mystery wrapped in enigma. The reasoning of the Tribunal that in only one instance of transports, Kinetic Honda two-wheeler was used and other vehicles were autos/trucks, does not make much sense. If a dealer does not offer explanation as to why he militantly lied even in respect of one single vehicle, that would cast shadow on the truthfulness of his other statements. We hasten to add that we are not invoking the maxim falses in uno, falses omnibus i.e., proof of falsity in one thing raises a strong presumption of falsity in everything - There is force in the submission of learned AGA that the version of officials of the Tax Department, founded on evidentiary material as to the unscr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Respondent on purchases effected from dealers who had failed to discharge their tax liability on such sales? (2) Whether the Tribunal was right in allowing the Respondent's Appeal and setting aside the disallowance of input tax credit claimed by the Respondent, despite the fact that the Respondent had utterly failed to discharge his burden of proving the correctness and genuineness of such claim? (3) Whether the Tribunal was right in rejecting the State's Cross Appeal and affirming the order of the first appellate authority in so far as it set aside the levy of penalty under Section 70(2)(a) of the KVAT Act?" 3. The above questions arose in the following fact matrix of the case: 3.1 The Respondent-Assessee is a dealer registered under the provisions of the 2003 Act. He runs the business in computer consumables & electrical goods like copper/GI strips, sheets, patties, plates, wires etc. The respondent claims to have purchased goods from a number of local and interstate traders. The respondent has filed its returns in Form VAT 100. The relevant tax periods occur between May 2005 and September 2008. The genesis of the lis is in the Re-assessment Order dated 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsent & unrepresented. However, that would not come in the way of Appeal is being decided on its merits and in accordance with law. 5. Having heard the learned AGA appearing for the Revenue and having perused the Petition papers, we are inclined to grant indulgence in the matter as under and for the following reasons: 5.1 The first contention of the learned AGA appearing for the Revenue that the very approach of the Tribunal to the Appeals of the Assessee and cross-Appeals of the Department is juridically defective stands adumbrated and reasons for this are not far to seek: A reading of the Statements of Objects and Reasons of the Act makes it clear why the burden of proof is cast upon the Assessee u/s. 70. While the VAT regime was introduced to give relief from the cascading effects of tax (ie., tax on tax) on goods, the enforcement of the Act relied heavily on transparency, self-assessment & declaration, timely & specific invoicing, and truthful & timely filing of returns. Further, structure designed to give full credit or set-off for tax already paid in the chain of value addition or in earlier points of sale would only work if that component of the tax (i.e., the input tax) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient and cannot be said to be proving the burden as per section 70 of the Act, 2003." 5.3 The Tribunal at Page No.14 of its order has observed that the Revenue has got power u/s.87 of the Act to secure the dealers as witnesses to answer the queries and the Assessee can cross-examine them. This amounts to placing the burden of proof on the Revenue when it should rest on the shoulders of the Assessee and this militates against the ratio in M/s. ECOM GILL COFFEE supra. We hasten to add that such a power does lie with the Revenue is true; however, that does not place the burden on the Revenue. At internal Page No.15 it has observed: "…Further on this ground alone the collusion between the Appellant and the selling dealer has been alleged for the first time without pleading and proving the same by the respondents. The observations of the AA and FAA in their respective orders that the dealers in question are fake dealers indulged in the bill trading as per the investigation conducted by the department in other cases for different tax period cannot be the sole ground to consider them as such in the present transaction with the appellant. …" The Revenue officials h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring at the Assessee. One cannot be oblivious to the fact that a very small section of dealers could be unscrupulous, might be in varying degrees. Mr. There is force in the submission of learned AGA that the version of officials of the Tax Department, founded on evidentiary material as to the unscrupulous transactions cannot be lightly interfered for askance. Therefore, the Tribunal is not justified in upsetting the findings recorded by the Assessing Authority. Even the First Appellate Authority committed an error in upsetting the levy of penalty inasmuch as, there was absolutely no material warranting the same. 5.5 Learned AGA is more than justified in contending that the Tribunal is unjustified in recording a finding that the Assessee has made payments to the registered selling dealers by cheques. Absolutely, no material is produced by the Assessee to vouch his version that the said cheques have been encashed. The factum of encashment could have been very easily established by producing an authenticated Bank Statement of Account or by showing the entries in the Pass Book. Absolutely, no explanation is offered by the Assessee as to why he did not do that. On what basis Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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