1994 (1) TMI 247 - HC - VAT and Sales Tax

High Court upholds Tribunal decision on disputed turnover, emphasizes burden of proof in tax assessments

State of Tamil Nadu Versus SP. Meyyammai Achi

State of Tamil Nadu Versus SP. Meyyammai Achi - [1994] 95 STC 333 (Mad) Issues:1. Assessment reopened under section 16 of the Tamil Nadu General Sales Tax Act, 1959.2. Disputed purchases of stainless steel sheets from Mineral and Metal Trading Corporation.3. Revised assessment including penalty and subsequent appeals.4. Tribunal's decision on disputed transactions lacking documentary evidence.5. Burden of proof on the assessee regarding the disputed transactions.Analysis:The judgment delivered by the High Court of Madras pertains to a tax revision filed against the order of the Tamil Nadu Sales Tax Appellate Tribunal. The case involved the reopening of assessment under section 16 of the Tamil Nadu General Sales Tax Act, 1959, due to disputed purchases of stainless steel sheets from Mineral and Metal Trading Corporation (MMTC). The Revenue claimed that the appellant had purchased these sheets, which were not reflected in the initial return submitted by the assessee for the assessment year 1978-79. The assessment was revised, including a turnover and penalty, which was upheld by the Appellate Assistant Commissioner, leading to subsequent appeals to the Tribunal.Upon remand, it was found that the assessee had taken delivery of stocks in three out of seven disputed transactions. However, the Appellate Assistant Commissioner maintained that the appellant had not proven non-receipt of the stainless steel sheets in the remaining four transactions, upholding the assessment based on the presumption that the sheets were converted into vessels. Subsequently, the Tribunal found that there was a lack of documentary evidence supporting the purchases in the four disputed transactions and deleted the turnover related to those transactions.During the revision petition, the Additional Government Pleader argued that the burden of proof lay on the assessee to show non-receipt of the stainless steel sheets. However, the High Court disagreed, stating that since the Appellate Assistant Commissioner's decision was based on presumption and the Tribunal's finding was supported by records, there was no justification to interfere with the Tribunal's decision. The Court dismissed the petition, upholding the Tribunal's decision to delete the turnover related to the disputed transactions lacking documentary evidence.In conclusion, the High Court affirmed the Tribunal's decision, emphasizing that in the absence of documentary evidence supporting the purchases, the burden of proof did not rest solely on the assessee, especially when the assessment was based on presumption. The judgment highlights the importance of substantiating transactions with proper documentation in tax assessments and the significance of judicial review based on factual findings.