1992 (8) TMI 267 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to deduction under section 8(iii) of the Gujarat Sales Tax Act, 1969, based on certificates issued by an unauthorized nominee.
2. Entitlement to deduction under section 8(iii) based on certificates allegedly signed by the licensed dealer with disputed signatures.
3. Burden of proof for claiming deduction of sales against certificates in form 17.
4. Validity of disallowing the deduction claim based on signature comparison in the second appeal.
5. Whether the selling dealer can establish the genuineness of certificates by other evidence despite procedural lapses.

Detailed Analysis:

Issue 1: Entitlement to Deduction Based on Certificates Issued by Unauthorized Nominee
The Tribunal held that the applicant was not entitled to deduct sales from its turnover under section 8(iii) of the Gujarat Sales Tax Act, 1969, because the certificates issued by Shri Bhagwandas Hirumal as the Manager of M/s. Lucky Trading Company were unauthorized and invalid. His name was not entered in Part II of the statement attached to the license issued in form No. 7, making the certificates invalid.

Issue 2: Entitlement to Deduction Based on Certificates Allegedly Signed by Licensed Dealer
The Tribunal concluded that the applicant was not entitled to the deduction because the signatures in Hindi on the certificates could not be compared due to a lack of material on record, and the full signature in English did not match the available records. The Tribunal found discrepancies in the signatures and noted that the licensed dealer, Govindram Samatmal, had denied any transactions with the applicant in an affidavit.

Issue 3: Burden of Proof for Claiming Deduction
The Tribunal determined that the applicant did not discharge the burden of proving the claim for deduction of sales against certificates in form 17. The applicant failed to provide adequate evidence to substantiate the genuineness of the certificates. The procedural formalities required by the Act and the Rules were not fulfilled, and the Sales Tax Officer's conclusion that the transactions were bogus and shady was upheld.

Issue 4: Validity of Disallowing Deduction Claim Based on Signature Comparison
The Tribunal held that the applicant's claim for deduction based on the comparison of signatures in the second appeal was invalid. The lower authorities had not adopted this basis, and the applicant could not produce Govindram Samatmal for confirmation of the signature on form 17. The Tribunal emphasized that the procedural requirements, such as lodging specimen signatures with the department, were not met.

Issue 5: Establishing Genuineness of Certificates by Other Evidence
The Tribunal ruled that the selling dealer could not establish the genuineness of certificates by other evidence if procedural formalities were not strictly followed. The Tribunal referred to the stringent conditions imposed to prevent fraud and ensure administrative efficiency. The Tribunal concluded that the applicant's attempt to prove the genuineness of the certificates through other evidence was not permissible.

Conclusion:
The Tribunal answered questions 1, 2, 3, and 4 in the affirmative against the assessee and in favor of the Revenue, concluding that the applicant was not entitled to the claimed deductions. Question 5 was answered in the negative, against the assessee and in favor of the Revenue, emphasizing the necessity of strict compliance with procedural formalities for claiming deductions. The reference was answered accordingly, with no order as to costs.