The validity of exemption claims under the TNGST Act depends on the existence of business by the selling dealers during the relevant assessment years.

Common Order

(Order of the Court was made by F.M.IBRAHIM KALIFULLA,J.)

1. The petitioner seeks to challenge the order of the second respondent-Tribunal in T.C.R.Nos.797 to 799 of 1997 dated 01.12.1999 against the common order passed in M.T.A.Nos.15 and 16 of 1987 and M.T.M.P.No.75 of 1987 in M.T.A.No.16 of 1987, which related to the assessment years TNGST 1983-84 and 1984-85. As the point involved in all the writ petitions is one and the same, these writ petitions are being disposed of by this common order.

2. The short facts are that the petitioner was a dealer in groundnut. The assessment years relate to 1983-84 and 1984-85. There was exemption for groundnut purchases, which had suffered tax already in the relevant assessment years. According to the petitioner, he purchased groundnut from one Thiru.S.Abdul Khader of Saleem Traders for the year 1983-84 and from Mohamed Meera Sha for the year 1984-85, who claimed to be the registered dealers and were doing business in groundnut in Dindigul. The petitioner, based on such purchases made from those dealers as well as based on the permits issued by the Marketing Committee of Dindigul, claimed exemption on the ground of second sales, which was initially accepted by the Assessing Officer. However, the assessment was subsequently re-opened and a tax of Rs.1,881/- on a turnover of Rs.62,689/- and a penalty of Rs.2,821/-were made under Section 16(2) of the TNGST Act, by an order dated 30.09.1985 for the year 1983-84. Similarly, by an order dated 14.02.1986, levy of tax on a turnover of Rs.7,67,062/- with a penalty of Rs.34,517/-was made for the year 1984-85. The petitioner preferred appeals before the Appellate Assistant Commissioner, who by his order dated 17.10.1986, dismissed the appeals preferred by the petitioner. Further appeals were preferred by the petitioner before the Sales Tax Appellate Tribunal (hereinafter referred to as "STAT") in M.T.A.No.15 and 16 of 1987 and M.T.M.P.No.75 of 1987 in M.T.A.No.16 of 1987. The STAT however took a view that when once the purchases were made by the petitioner from a registered dealer, it should be presumed that such purchases were bona fide unless the said presumption was rebutted by substantial legal evidence. The STAT therefore allowed the appeals preferred by the petitioner. The State preferred Tax Case Revisions in T.C.R.Nos.797 to 799 of 1997 before the second respondent-Tribunal herein and by the impugned common order, the second respondent-Tribunal held that the so called purchases and the bills relied upon by the petitioner were bogus one and therefore, the claim of second sales cannot be accepted. The second respondent-Tribunal therefore, by its order dated 01.12.1999 allowed the revisions, set aside the order of the STAT and restored the orders of the Appellate Assistant Commissioner as well as the Assessing Authority.

3. Assailing the order of the second respondent-Tribunal, Mr.Sivanandam, learned counsel appearing for the petitioner would contend that the second respondent-Tribunal relied upon its own conclusion in an earlier order, wherein it took the view in regard to the very same dealer, viz., one Mr.Mohamed Meera Sha, whose registration certificate was cancelled retrospectively with effect from 11.01.1984 and that the reliance placed upon such an earlier order by the second respondent cannot be accepted. The learned counsel would contend that when the petitioner produced valid bills accompanied by the permits of the Market Committee, there was no reason to question the authentication of the purchases made by the petitioner from those dealers and therefore, the second respondent-Tribunal ought not to have interfered with the order of the STAT. The learned counsel by relying upon the decision of this Court reported in [(2010) 28 VST 228 (State of Tamil Nadu vs. Sri Alaggar Traders] would contend that when the registration certificate of the selling dealer was valid at the relevant time, merely because the selling