Tax burden and account-keeping rules displaced old presumptions; unclear French coffee turnover findings required remand.

Under the Madras General Sales Tax Act, 1959, the dealer bears the burden of proving that a transaction is not liable to tax, and the statutory requirement to maintain true, correct and separate accounts displaced the earlier presumption available under the repealed regime. The assessee could not rely on that presumption to avoid the new statutory burden. On the French coffee turnover, the record did not show a clear finding on how much of the coffee component had already suffered tax, and the Tribunal's reasoning on non-taxability was obscure. The turnover issue therefore required remand for fresh determination in accordance with law.

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Issues: (i) Whether the burden of proving non-liability to tax under the Madras General Sales Tax Act, 1959, and the obligation to maintain proper accounts and separate sales accounts displaced the earlier presumption applied under the repealed sales tax regime. (ii) Whether the order dealing with the French coffee turnover could be sustained on the existing findings or required remand for fresh determination.

Issue (i): Whether the burden of proving non-liability to tax under the Madras General Sales Tax Act, 1959, and the obligation to maintain proper accounts and separate sales accounts displaced the earlier presumption applied under the repealed sales tax regime.

Analysis: The statutory scheme placed the burden on the dealer to prove that any transaction was not liable to tax. The Act and the Rules required true and correct accounts, separate sales accounts for different taxable goods, and stock accounts for wholesale dealers, importers and manufacturers. In that setting, the earlier view that a presumption could be raised in favour of the assessee despite the absence of proper separate accounts could not govern the new Act.

Conclusion: The earlier High Court decision required reconsideration, and the assessee could not rely on the earlier presumption to avoid the statutory burden.

Issue (ii): Whether the order dealing with the French coffee turnover could be sustained on the existing findings or required remand for fresh determination.

Analysis: The appellate record did not contain a clear finding as to how much of the coffee component in the French coffee had already suffered tax under the relevant schedule entry, and the Tribunal's reasoning on non-taxability was found to be obscure. In those circumstances, the existing orders could not finally determine the liability on that turnover and a fresh examination was necessary.

Conclusion: The order on the French coffee turnover could not stand and the matter had to be remanded for fresh disposal in accordance with law.

Final Conclusion: The appeal succeeded for the State, the contrary orders were set aside, and the dispute was sent back for fresh adjudication on the turnover question.

Ratio Decidendi: Under a taxing statute that expressly places the burden of proving non-liability on the dealer and requires mandatory account-keeping, an assessee cannot displace tax liability by relying on a presumption unsupported by the statutory records; where the factual basis for exemption is unclear, remand is necessary.

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