Burden of proving intra-State sale under sales tax law cannot rest on inference alone when material is absent.

Cotton yarn turnover was held not to be proved taxable under the U.P. Sales Tax Act because the department failed to establish that the sale took place within Uttar Pradesh. The finding that the goods never reached Delhi was accepted as a factual finding, but that fact alone did not prove an intra-State sale. Tax liability could not be presumed merely because the assessee's inter-State transaction case failed; the taxing authority still had to show when, where and to whom the sale was made in the State. On the record, no such material existed, so the result was against the revenue and in favour of the assessee.

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Issues: Whether the turnover of cotton yarn was liable to tax under the U.P. Sales Tax Act on the facts found.

Analysis: The finding that the goods never reached Delhi was accepted as a finding of fact, but that did not by itself establish a sale in U.P. The taxing department was required to prove that the sale took place within the State, because a sale cannot be presumed merely from the rejection of the assessee's case of an inter-State transaction. There was no material showing when, where, or to whom the sale was made in U.P.

Conclusion: The turnover was not proved to be liable to tax under the U.P. Sales Tax Act and the answer was against the revenue and in favour of the assessee.

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