TMI Blog1995 (11) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... dnut is declared goods, taxable under section 6 read with Schedule III. The point of levy is as follows: "When purchased by an oil miller other than a decorticating miller in the State, at the point of purchase by such miller and in all other cases at the point of purchase by the last dealer who buys in the State." Thus, the appellants not being oil millers are not liable to tax at the point of first purchase but the liability attaches to them if they are the last purchasers. In respect of the groundnut seeds sold to other registered dealers in the State, the appellants claimed exemption inasmuch as the appellants would not be last purchasers. The assessing authority allowed the exemption on a scrutiny of the accounts, bills and the affidavits filed from the purchasing dealers. In this exempted turnover, the purchase turnover corresponding to the sales effected to a registered dealer by name, M/s. P. Sudhakar Oil Mills, Kishanganj, Hyderabad, were also included. The affidavits filed by M/s. P. Sudhakar Oil Mills to the effect that they purchased the groundnut seed from the appellants and included the same in their turnover, are on record. About two years later, it appears tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed both by the appellants as well as M/s. Sudhakar Oil Mills in connection with the sale and purchase of groundnut seeds. The affidavits given by the brokers contain the details of way bill numbers, lorry numbers and the numbers of the bank drafts handed over by M/s. Sudhakar Oil Mills and received by them through their counterparts at Hyderabad. In some cases, a tabular statement furnishing the bill-wise and consignmentwise details with way bill numbers, vehicle numbers and details of bank drafts were filed. The assessing authority solely relying upon the letter of M/s. P. Sudhakar Oil Mills addressed to the Commercial Tax Officer, Osmanganj, confirmed the proposed reassessment. The assessing authority who passed the reassessment orders observed that the appellants failed to discharge the burden cast upon them to prove the genuineness of the transactions in dispute in rebuttal of the statement of the purchasing dealer. In the absence of proof to the effect that the purchasing dealer entered the transactions in his books of account and paid the tax thereon, the appellants became liable to pay the tax as last purchasers. It was further observed that the appellants did not produce an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Sudhakar Oil Mills and the alleged denial of transactions by the said dealer is made the sheet-anchor of the revision just as it was made the basis of reassessment. Filing the bills or evidence in support of transport of the goods were found to be insufficient to discharge the burden of proof. Referring to the receipt of money by demand drafts, the learned Commissioner commented that the appellants "only cited one or two demand drafts which were issued on dates far removed from the dates of transactions", and it could very well be that the said demand drafts would have been received in connection with various other undisputed transactions with M/s. Sudhakar Oil Mills. Referring to the reasoning of the appellate authority that the signatures of the proprietor of M/s. Sudhakar Oil Mills in various affidavits differ from one another, the Commissioner observed that it was of no consequence. Another important observation made by the Commissioner was that the assessee "did not even produce a statement of account of M/s. Sudhakar Oil Mills in his books, to establish the total number of transactions, total amount received and other details". The Commissioner found no illegality in ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y facts before the assessing authority including the facts which are within his exclusive knowledge. If, without the scrutiny of accounts and/or without regard to the basic facts requisite to come to a conclusion regarding which the assessee is in a position to throw light, the exemption is granted, it would be a case of illegal or improper exemption. But, it is well-settled that the burden of proof does not throughout rest on the dealer. When once the dealer has furnished relevant material in his possession and placed the primary facts before the assessing officer, the duty cast on him must be deemed to have been discharged. Whether or not the burden has been discharged satisfactorily by the assessee is a question regarding which a hard and fast rule cannot be laid down. It depends upon the facts of each case. The next principle to be noted is that revisional power cannot be exercised on conjectures and surmises. The revisional authority must have before him adequate basis and justification to upset the exemption already granted or the relief already allowed. As far as reassessment is concerned, it is now well-settled that the power under section 14(4)(cc), cannot be exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase is established, the liability to pay tax does not shift to the appellants merely because the purchasing dealer did not disclose his turnover fully and correctly or that he has not paid the tax. That is the view taken by a Divisional Bench of this Court in State of A.P. v. Thungabhadra Industries Ltd. [1986] 62 STC 71. However, the non-accountal of the goods by the purchasing dealer can be a ground to entertain a doubt on the genuineness of the transactions and may furnish a basis for a further probe, but it does not ipso facto falsify the assessee's claim. Another erroneous approach made by the assessing authority who passed the reassessment order was that he was under the impression that the proprietor of M/s. Sudhakar Oil Mills denied the purchases but there is no such statement in the letter relied upon by the Commercial Tax Officer. Obviously, the statement in the letter was misread by the Commercial Tax Officer. In fact, the Commissioner himself states in the impugned order that "the statement neither admits nor denies the transactions". In the present case, there is no dispute that the purchaser, M/s. Sudhakar Oil Mills, is a real dealer registered with the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce of money for the drafts. It cannot be expected that the appellants will be able to secure the information in this regard from the banks after the lapse of so many years, nor is it reasonable to expect the appellants to ascertain the information from the purchasing dealer. As the disclosure of any such information will be detrimental to the interests of the purchasing dealer who had not accounted for the goods, the appellants cannot be expected to discharge the burden of getting the information from the purchasing dealer and placing it before the assessing authority. Having failed to make the necessary enquiries in this regard, it would be wholly unreasonable to make the appellants responsible for the non-disclosure of this information. The doctrine of burden of proof cannot be put in a straight-jacket formula nor could it be viewed in the abstract. A realistic approach is what is called for. The Commissioner commented that the appellants furnished the details of only one or two drafts in each case but that is not correct. We have gone through the record. We find that the details of all the drafts ostensibly correlated to the disputed transactions were furnished by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. It is a different matter if the appellants did not furnish the relevant material or information which was within their knowledge and thereby failed to discharge the burden of proof cast on them. But, to require the appellants to pay the tax for the reason that the purchasing dealer did not account for the transactions or report the turnover is by itself not a valid ground to withdraw the exemption already granted. In view of the fact that such nonaccountal was in the interests of the purchasing dealer himself and apart from the bare statement given by the proprietor of M/s. Sudhakar Oil Mills that he did not account for the disputed transactions, no enquiry whatsoever was made by making a probe into his accounts and other records to ascertain whether the non-accountal was for the reason that he did not in fact receive or pay for the goods. Thus, we find that the main basis of reassessment revision is unsustainable and most of the reasons given by the revisional authority reflect an erroneous approach to the crucial question that fell for his consideration. The theory of burden of proof has been carried beyond permissible limits to cover up the default in making further enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts with reference to the appellants' accounts. In these circumstances, we are not inclined to reject the appellants' case on the technical ground that the appellants should have furnished the extracts of account statements before the Commissioner especially when that is only one of the aspects that weighed with the Commissioner. In the circumstances, it appears to us that the just and proper course is to set aside the revisional and appellate orders as well as the reassessment orders and to direct the assessing authority to pass orders afresh vis-a-vis the disputed transactions after examining the accounts of the appellants. In other words, the assessing authority shall refrain from withdrawing the exemption if it is revealed on a scrutiny of the accounts and the records that the disputed transactions pertaining to sales effected in favour of M/s. Sudhakar Oil Mills were duly accounted for in the books of accounts and the payments were received through the bank drafts referred to by the appellants. It is also open to the assessing authority to verify whether the appellants' accounts reveal payments of commission to brokers who gave the affidavits and if not, what is the proper infe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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