State of Tamil Nadu vs Baldev Steels Pvt. Ltd.

The Commercial Tax Department has preferred this tax case revision challenging the order of the Sales Tax Appellate Tribunal (Additional Bench) Chennai, dated January 9, 2004 passed in S.T.A. No. 397 of 2001. The assessment order pertains to 1989-90. The questions of law raised are as under:

(1) Whether the Sales Tax Appellate Tribunal is right in proceeding on the footing that in order to discharge the burden of proof contemplated u/s 10 of the Tamil Nadu General Sales Tax Act, 1959 the proof of existence of registered dealers from whom the assessee purported to have purchased goods is sufficient, ignoring that for claiming second sales exemption the assessee has to prove earlier taxable sale ? and

(2) Whether the Sales Tax Appellate Tribunal has not committed an error in not insisting upon proof of actual transaction of sale for claiming second sale exemption ?

According to the respondent-assessee the entirety of the alleged taxable turnover to the tune of Rs. 29,90,445 was by way of second sales and, therefore, exempted from payment of tax. In fact there was an earlier order of assessment which was set aside by the Appellate Assistant Commissioner who remanded the matter for fresh disposal with the instruction to reject the accounts of the dealers from whom the respondent/assessee is stated to have made the purchases. After remand, the assessing authority passed his order on December 13, 1991 confirming his earlier order of the taxable turnover in a sum of Rs. 29,90,445 as well as the penalty of Rs. 1,77,283 u/s 12(3) of the Tamil Nadu General Sales Tax Act. The said order was again challenged by the respondent/assessee before the Appellate Assistant Commissioner who allowed the appeal as against which the petitioner preferred the appeal before the Sales Tax Appellate Tribunal which came to be disposed of by the impugned order.

A perusal of the order of the Appellate Tribunal discloses that the Appellate Assistant Commissioner examined the claim of the respondent-assessee of exemption with particular reference to the registration certificates of the bill traders. The Appellate Assistant Commissioner has found that there was two such dealers from whom the respondent was stated to have made the purchases, namely, M/s. Steel Syndicate, Chennai, and Tvl. Omega Enterprises. As far as M/s. Steel Syndicate was concerned the registration certificate was stated to have been cancelled from July 5, 1991. As far as M/s. Omega Enterprises was concerned, there were two versions, namely, that, according to Enforcement Wing Officers the registration certificate was cancelled on December 28, 1988, whereas according to the assessing officer the cancellation was with effect from July 10, 1989. Apart from the above details referred to by the assessing officer the respondent-assessee stated to have produced copy of the money receipts towards payment of renewal fees for the year 1989-90. The Appellate Assistant Commissioner, therefore, held that while in the case of M/s. Steel Syndicate even the so-called cancellation of the registration was only on July 5, 1991 in respect of M/s. Omega Enterprises, apart from two different dates referred to by the assessing officer as dates of cancellation, namely, December 28, 1988 and July 10, 1989, the money receipts produced by the assessee in proof of payment of renewal fees for the year 1989-90 disclose that the alleged cancellation of registration certificate cannot be accepted. Therefore, the Appellate Assistant Commissioner, based on the materials placed before him in the form of records relating to the assessing officer''s order dated December 13, 1991, held that the conclusion of the assessing officer that exemption claimed by way of a second sales cannot be accepted was erroneous.

The Appellate Assistant Commissioner has also held that in light of the fact that cancellation of registration certificate in respect of M/s. Steel Syndicate was subsequent to the relevant year, namely, on July 5, 1991 and the conflicting dates with the so-called cancellation of the registration of M/s. Omega Enterprises as well as the money receipts payment of renewal fees for the year 1989-90, there should been reliable material, to support the stand of the assessing authority that the registration certificate of the concerned dealers were really cancelled, in order to doubt the exemption claimed by the by way of second sales. Having bestowed our careful consideration of the order of the Appellate Assistant Commissioner as well as the Tribunal, we are convinced that such a conclusion arrived at by the Appellate Assistant Commissioner as affirmed by the Tribunal was based on relevant facts and materials and there is no reason to take a different view than what has been stated by the said authorities. We, therefore, do not find any scope to interfere with the order impugned in this revision petition. The questions of law raised in this revision are, therefore, answered against the petitioner. The tax case revision fails and the same is dismissed. There shall be no orders as to the costs.