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TMI Blog2014 (5) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the State, when the first appellate authority has allowed the respective portion after giving a detailed discussion? 2. Whether the Appellate Tribunal is right in confirming the levy of tax on second sales exemption on sale of declared goods on a mere ground that the registration certificate of the seller is cancelled with retrospective effect? 3. Whether the Appellate Tribunal is correct in deying second sales exemption by negating the law laid down by the Apex Court in 109 STC 439, where it has been held that "whatever might be the effect of a retrospective cancellation upon the selling dealer, it could have no effect upon the person who had act upon the strength of a registration certificate when the registration was current? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traders, the claim of exemption was rejected by the Assessing Officer. It was pointed out that bill traders had opened the accounts in the same bank where the assessee had its operation and the cheque issued were encashed on the same day. In the circumstances, the claim for exemption originally granted was sought to be withdrawn by taking recourse to reassessment proceedings. The assessee objected to the assessment on the ground that the purchases were from the registered dealers who were granted registration by the Commercial Tax Officer, Park Town II after observing the due procedure laid down under the Act. In the circumstances, the assessee pleaded that the second sale exemption originally granted be accepted. The Assessing Officer poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallow the exemption. The first Appellate Authority also applied the law laid down in 52 STC 124 STATE OF TAMILNADU v. CHAMUNDESWARI ENTERPRISES and finally held that the assessee being a subsequent seller, it was not for him to show that the anterior sale was in fact taxed. The fact is that the dealer who sold the goods to the assessee was in existence at the time when the sale was effected. The Appellate Assistant Commissioner allowed the assessee's appeal, thereby cancelled the assessment. Aggrieved by the same, the Revenue went on appeal before the Sales Tax Appellate Tribunal, who allowed the Revenue's appeal thereby, restored the assessment. The Tribunal pointed out that in cancelling the second sale exemption, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hases effected from the bill traders would not be recognised as a taxable sale for the purpose of granting exemption to the assessee. However, the fact is that the Revenue itself had accepted that the said dealers were assessed and the registration also was renewed even subsequent to the assessment on 9.4.1990. Thus, the fact is that during the material assessment year now under consideration viz., 1989-90, the assessee's vendors were already assessed by the Revenue. The orders of assessment were passed only after scrutiny of accounts. The mere fact that the department had cancelled the registration certificate of the vendors retrospectively per se would not be of any assistance to the Revenue to deny the second sale exemption. The cancella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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