Entry tax burden shifts to Revenue where a sale bill lacks the statutory endorsement under section 7(1).

Entry tax under the Madhya Pradesh Entry Tax Act is a single-point levy triggered by entry of goods into a local area, and a sale bill lacking the section 7(1) endorsement has evidentiary significance when goods are purchased from one registered dealer by another. The missing endorsement does not by itself fasten liability on the purchasing dealer, but it supports a prima facie inference that the goods were not local goods in the seller's hands and that tax had not already crystallised earlier. Once the purchaser relies on that bill, the Revenue must rebut the inference by proving that entry tax was payable or that the absence of endorsement was otherwise explained. The assessee succeeds unless that burden is discharged.

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Issues: Whether, on purchase of Schedule II goods from a registered dealer, absence of the rubber-stamp endorsement required on the sale bill by section 7(1) of the Entry Tax Act makes the purchasing dealer liable to entry tax and, correspondingly, whether such absence shifts the burden to the Revenue to prove that the goods were local goods and that the taxable event had not already occurred earlier.

Analysis: Entry tax under section 3(1) of the Entry Tax Act is attracted by entry of goods into a local area for consumption, use or sale and is a single-point levy. Where a registered dealer purchases goods from another registered dealer, the purchasing dealer may establish a prima facie case by producing a bill that does not bear the endorsement required by section 7(1) stating that the goods are local goods and that no entry tax has been paid. The statutory scheme of section 7 is designed to identify the dealer on whom the liability has already crystallised and to protect honest dealers; therefore, non-affixture of the endorsement is of evidentiary significance and supports the inference that the goods were not local goods in the hands of the seller. That circumstance is not conclusive, but once relied upon by the purchaser, the Revenue must displace the prima facie inference by showing that the goods were local goods or that the absence of the endorsement was accidental or otherwise explained.

Conclusion: The purchasing dealer is not liable merely because the bill lacks the endorsement, and the burden shifts to the Revenue to prove that entry tax was payable by the purchasing dealer; the issues are answered in favour of the assessee.

Final Conclusion: The references were answered by holding that the non-affixture of the statutory endorsement on the sale bill has evidentiary value and that the Revenue cannot ignore it; the assessee succeeds because the levy cannot be sustained without rebutting the prima facie inference arising from the bill.

Ratio Decidendi: In entry tax , production of a sale bill lacking the statutory endorsement under section 7(1) constitutes prima facie evidence that the goods were not local goods in the seller's hands, and the Revenue bears the burden of rebutting that inference before fastening liability on the purchasing dealer.

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