Claim of second sale exemption and the imposition of penalty u/s ...

Dealer's burden to prove initial sale for second sale exemption; wilful suppression invites penalty.

Case Laws     VAT / Sales Tax

November 22, 2024

Claim of second sale exemption and the imposition of penalty u/s 12(5)(iii). The High Court held that when the burden was on the dealer to prove the factum of second sale, the respondent had failed to discharge this burden by proving the actual first sale, which was a prerequisite for claiming the exemption. The Tribunal had erroneously shifted the burden from the dealer to the revenue. Relying on previous decisions, the High Court reiterated that the burden of proving an earlier taxable sale was on the assessee. Regarding the penalty u/s 12(5)(iii), the Court held that since the respondent had wilfully suppressed taxable turnover and failed to file returns, the Assessing Officer was justified in imposing the penalty, and the Tribunal's decision to delete the penalty was untenable. Consequently, the High Court set aside the Tribunal's order and restored the assessment order confirmed by the appellate authority.

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