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2018 (4) TMI 647

oof that any transaction or turnover of a dealer is not liable to tax shall lie on such dealer. When exemption of tax on second sales is claimed by the assessee, it is for the assessee to establish that the transactions were bona fide on two aspects, namely, (i) that the purchases were made by the assessee and the goods so purchased had suffered tax already and (ii) that such purchases were made from the dealers whose registration were in force on the date of purchases. - The respondent had proved with records, the sufferance of tax was in anterior sales within the state. The first appellate authority, after due verification of the connected records and other related materials, allowed the claim of the assessee, as second sales of machi .....

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arguments of both the sides and perused the connected records. The learned Additional State Representative has relied on the order of the Assessing Officer and argued to restore the same. The Assessing Authority assessed the turnover of ₹ 25,10,000/- and restricted the claim only to a turnover of ₹ 3,93,632/-, as the assesses have proved the sufferance of tax only to the purchase of textile machinery, he disallowed the claim of second sales of machinery at ₹ 20,77,005/-. 5. The learned first appellate authority has allowed the claim on the second sales of machinery for ₹ 20,77,005/- The Assessing Authority has held that the appellants had purchased 8 Nos. of Textile Machinery for ₹ 3,93,632/-in 1986 and 1990 b .....

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some machinery frames other than those purchased locally. As the written down value is very less, the profit margin is very high. As rightly contended by the appellants, the profit cannot be assessed. What has been sold is only the locally purchased tax suffered goods. The appellants have also effected first sale of a machinery and for this also the sale value is very high as compared to the written down value. In view of the above, I hold that the Assessing Authority is not correct in restricting the second sales claim and assessing the differential value. The written down book value, the cost price and the sale value cannot be compared unless it is proved with records that the machinery has undergone a sea change and it has not suffered .....

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tor and other spares have been sold along with the machinery since the machineries worth ₹ 80,361/- was sold for ₹ 25,10,000/- d. The Textool 5A frames machines of four sets were found to have been purchased on 22.09.1986 and reflected in a separate ledger folio and necessity of such thing has not been examined by the Appellate Assistant Commissioner of Commercial Taxes. 8. Against the above grounds of Appeal, the respondents would submit the following:- i. The respondents had filed the details of sales of machinery both taxable and non-taxable. They had also furnished the copies of the purchase bills to prove the sufferance of tax in the earlier sale within the State. The Assessing Authority has detailed this fact and furnished .....

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spondents have also effected first sale of machinery and for this also the sale value is very high as compared to the written down value. The learned Authorised Representative for the respondent would argue that the case law of C.Pandian Vs. State of Tamil Nadu reported in 105 STC 449 relied on by the appellant-State is not applicable to the case on hand. On facts and circumstances, that the Assessing Officer refers to a case which the dealer had claimed exemption towards second sales but failed to produce necessary evidence and records for the same and also failed to prove the sufferance of tax in the anterior sale. Whereas, in the case on hand, the facts and circumstances are entirely different and distinct in which the respondents have p .....

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newly assembled machinery and when the second sales turnover of ₹ 25,10,000/- was disallowed and brought to tax as first sales of textile machinery and thus, the action of the assessing authority in this regard, is quite in order. 6. Learned Additional Government Pleader (Taxes), submitted that the Tribunal has failed to note that the dealers have claimed that they effected second purchase of machinery form Tvl. Tuticorin Spinning Mills Ltd., and Tvl.Gnanambigai Mills Ltd., as early as in 1986 and 1990 respectively, but the corresponding sales bills issued by the respective mills were not produced to prove that the very same machineries purchased were sold by them as second sales. He therefore submitted that the burden of proving the .....

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