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2022 (7) TMI 453 - HC - VAT and Sales TaxLevy of tax on turnover - purchase of cotton thread, cotton and leather from unregistered dealers - Whether in view of the facts and circumstances of the case the order passed under Section 22 which requires long drawn argument, the imposition of tax under section 22 of the Act is justified? HELD THAT:- There was no explanation for the turn over of purchase of leather from unregistered dealers that remained from being taxed. The provisions of Section 3(AAAA) apply at their own force to each case where purchase is made from an unregistered dealer. Once the assessee disclosed the same in its books of accounts that were examined during the course of assessment and which therefore, became part of the assessment record, the mistake is purely on account of an oversight. To that extent the reasoning given by the revenue authorities and the Tribunal cannot be faulted. Similar is the case with cotton thread. It is not the case of the assessee that it had disclosed manufacture of cotton thread in its books of accounts. In fact, the assessee set out a case that it had wrongly shown cotton thread in its trading account by way of purchase from other dealers. In absence of any invoice etc. to establish the purchase made by the assessee, and in face of his own disclosure that it had purchased the same, again the authorities or Tribunal have not erred in treating the same to have been purchased from unregistered dealer. There was also no debate or doubt as to that. However, that process of reasoning may never apply to the additions made on account of purchase of cotton. It is so because in the course of proceedings under Section 22, the assessee furnished a specific explanation that though, that cotton had been purchased by him from unregistered dealer, it was tax paid inasmuch as the unregistered dealer had purchased the same from a registered dealer M/s Sanjay Kumar of Agra. Once that explanation came to be furnished and the same was not found to be patently false or bogus, the issue became debatable. Unless evidence were led, the assessing officer could not have brushed aside the explanation furnished by the assessee. The question of law raised by the assessee is answered accordingly. The revision succeeds in part.
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