Prior-suffering-of-tax claim on cashew nut purchases required fresh enquiry despite conflicting invoices and admissions.

Tax liability on cashew nut purchases was questioned where the assessee's reply admitted sourcing from imports made by the seller, yet the invoices described the goods as local raw cashew nuts and showed collection of TNGST, surcharge and cess. The dispute turned on reconciling the assessee's admission with the contemporaneous invoices and determining whether the goods had already suffered tax in the seller's hands or at the point of sale to the assessee. On that record, the assessment could not stand without closer examination of the documentary evidence, and the matter was remanded for fresh enquiry.

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Issues: Whether the assessee could be fastened with tax liability again on the purchase of cashew nuts when the invoices indicated local purchase and prior suffering of tax.

Analysis: The assessee's reply to the pre-assessment notice contained an admission that the goods were purchased out of imports made by the seller, but the invoices produced before the authorities described the goods as local raw cashew nuts of Rajamundry and also reflected collection of TNGST, surcharge and cess. The matter therefore turned on a factual reconciliation of the assessee's admission with the contemporaneous invoices and on whether the purchases had already suffered tax in the hands of the seller or at the point of sale to the assessee. In such circumstances, the existing assessment could not be sustained without a detailed examination of the documentary record.

Conclusion: The tax levy was not finally upheld and the matter was sent back for fresh consideration after enquiry.

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