Back
1995 Supreme(All) 594
HIGH COURT OF ALLAHABAD
Prakash Krishna, J.
Shadi Ram Ganga Prasad
Versus
Commissioner of Trade Tax
Trade Tax Revision 1113 of 1995
Decided On : 20 May 1995
Trade Tax Revision 1113 Of 1995
B.K.Pandey, M.M.RAI, S.K.POSTI,
A dealer who purchases goods from a registered dealer is entitled to exemption from purchase tax under Section 3-D of the U. P. Trade Tax Act, 1948, and the burden of proof lies on the dealer to establish that the purchases were made from registered dealers.
Headnote:
PURCHASE TAX - U. P. TRADE TAX ACT, 1948 - SECTION 3-D - PURCHASE OF OIL SEEDS FROM REGISTERED DEALERS - APPLICANT DISCHARGED BURDEN OF PROOF - DEPARTMENT FAILED TO ESTABLISH OTHERWISE - EXEMPTION GRANTED.
Fact of the Case:
The applicant, a dealer, purchased oil seeds from registered dealers and claimed exemption from purchase tax under Section 3-D of the U. P. Trade Tax Act, 1948. The assessing authority, however, levied purchase tax on the ground that the applicant had not produced any prescribed form or proved beyond doubt that the purchases were made from registered dealers.
Finding of the Court:
The Tribunal upheld the assessing authority's order. The High Court, on revision, held that the applicant had discharged its burden of proof by providing a list of selling dealers, their addresses, and registration numbers. The department failed to establish that the applicant had not made purchases from registered dealers. Therefore, the purchases of oil seeds worth Rs. 1055009/- were not liable to purchase tax at the hands of the applicant.
Issues: 1. Whether the applicant had discharged the burden of proof to establish that the purchases of oil seeds were made from registered dealers. 2. Whether the department had established that the applicant had not made purchases from registered dealers.
Ratio Decidendi: 1. The applicant had furnished a list of selling dealers, their addresses, and registration numbers, which was sufficient to discharge the initial burden of proof. 2. The department failed to establish that the applicant had not made purchases from registered dealers. 3. The Tribunal's observation that it was not the department's business to inquire about these facts was perverse and unwarranted.
Final Decision: The revision was allowed, and the assessment order refusing to grant exemption of tax on the purchase of oil seeds amounting to Rs. 1055009/- was set aside. It was held that the applicant was not the first purchaser of the aforesaid purchases of oil seeds and was, therefore, not liable to pay purchase tax thereon.
( 1 ) THIS case has a checkered history. Assessment year 1965-66 is involved in the present revision. The revision is directed against the order dated 23-5-1995 passed by the Trade Tax tribunal Kanpur in Second appeal No. 438 of 1983.
( 2 ) THE applicant had purchased oil seed from the registered dealer situate in the State of U. P. and all purchases were made from registered dealer. It produced the list of entire purchases giving the name, address and registration number of the selling dealer. It appears that successive assessment orders were passed on account of remand order passed by the higher authority. Ultimately last remand order was passed by the Deputy Commissioner (Appeals) in Appeal No. 76 of 1978 decided on 19-6-1981 with certain direction. The crux of the direction given by the dy. Commissioner (Appeals) was that the claim of exemption set up by the applicant on the ground that the oil seeds were purchased from the registered dealer, should be examined afresh after examining the files of the selling dealer. The oil seed was taxable at the time of first purchase under Section 3-D of U. P. Trade Tax Act in the relevant assessment year. The assessing authority after remand has noted the direction given by the first appellate authority in its order. According to the applicant it has made purchases from 20 registered dealers and their name, addresses and the amount of purchase are mentioned in the assessment order. The assessing authority finding that out of 20 dealers, the files of only seven selling dealers could be available. The remaining files were either lost or were weeded out and in absence of the files, no further inquiry was possible. Ultimately, the assessing authority again levied purchase tax on the purchase of oil- seeds treating the applicant as first purchaser. He partly accepted the claim of the dealer in respect of Rs. 8094. 87, Rs. 7609. 60 and Rs. 10212. 24 out of the total claim of Rs. 1080925. 44. The said order was confirmed by the Deputy Commissioner (appeals) as well as by the Trade Tax Tribunal.
( 3 ) HEARD Sri M. M. Rai, learned counsel for the applicant and Sri B. K. Pandey, learned Standing counsel for the department. Learned counsel for the applicant pointed out that the Tribunal was not correct in treating the applicant as the first purchaser of the oil-seeds. The Tribunal has wrongly rejected the claim on the ground that the applicant has neither produced any prescribed form against the alleged purchases nor has proved beyond doubt that the alleged purchases have been made from the registered dealer. In contra the learned Standing counsel supported the order of the Tribunal.
( 4 ) LEARNED counsel for the applicant submitted that by insertion of Rule 12-B for the first time with effect from 4-03-1974, the prescribed form has been introduced for claiming exemption in the case of purchase tax for the purchase made from the registered dealer. Prior to the aforesaid date there was no prescribed form either under the Act or under the Rules framed therein. This proposition cannot be disputed by the learned Standing Counsel. The relevant assessment year involved is 1965-66. In this situation the observation of the Tribunal that the appellant has not produced any prescribed form against the alleged purchases, cannot be sustained. But that is not end of the matter, in as much as the Tribunal has recorded further finding that the applicant has failed to discharge the burden of proof that it made purchases form the registered dealers registered with the department.
( 5 ) LEARNED counsel for the applicant submitted that the dealer has given a list of selling dealers their addresses along with their registration numbers with the Sales Tax Department. Thus the applicant has discharged the initial burden. It may be noted here that in the assessment order itself the assessing authority has mentioned the names, and addresses of the selling dealer of the applicant. The applicant dealer
