Burden of proof in taxable turnover disputes: slips showing only cash transactions do not by themselves prove sales or purchases.

Where the department relied on slips that showed only cash transactions and did not themselves indicate sales or purchases, the burden remained on the revenue to first establish that the entries represented taxable transactions. Section 10 was held to shift the burden to the dealer only after the material relied on at least prima facie shows a sale or purchase within the Act. If the documents do not themselves evidence such transactions, the provision is not attracted and the disputed amounts cannot be brought into taxable turnover on that basis. The Tribunal's deletion of the turnover was upheld.

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Issues: Whether the department could bring the disputed amounts to tax as part of taxable turnover on the strength of slips which themselves did not indicate sales or purchases, and whether the burden under section 10 applied to the dealer in such circumstances.

Analysis: The slips relied on by the department were found to contain no intrinsic indication that the amounts represented transactions of sale or purchase; they spoke only of cash transactions. On that factual foundation, the burden remained on the department to establish that the entries evidenced sales or purchases before the amounts could be included in taxable turnover. Section 10, which places the burden on the dealer to prove that any dealer or transaction is not liable to tax, was held to apply only where the transaction is shown to be one of sale or purchase within the Act. If the documents themselves do not even prima facie show such a transaction, the section is not attracted.

Conclusion: The revision failed. The Tribunal's deletion of the disputed turnover was upheld, and the matter was decided against the revenue and in favour of the assessee.

Final Conclusion: The judgment affirms that where the documents relied on by the department do not themselves evidence sales or purchases, the department must first prove that the transactions are taxable before any burden shifts to the dealer.

Ratio Decidendi: The statutory burden on a dealer to prove non-liability to tax arises only after the revenue shows, at least prima facie from the material relied on, that the transaction is one of sale or purchase liable to assessment.

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