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of <h1>High Court grants exemption from sales tax on electric motors, stresses importance of evidence</h1> <h3>Delta Engineering Co. (Private) Ltd. Versus Commissioner of Sales Tax</h3> Delta Engineering Co. (Private) Ltd. Versus Commissioner of Sales Tax - [1999] 116 STC 236 (All) Issues:1. Rejection of account books and best judgment assessment.2. Entitlement to exemption on the purchase of electric motors.Analysis:1. The revision was filed against the Sales Tax Tribunal's order for the assessment year 1976-77. The applicant dealt in centrifugal pumps, electric motors, and diesel engines. The Sales Tax Officer rejected the account books and made a best judgment assessment. The applicant's appeal before the Assistant Commissioner was partly allowed, and the subsequent appeal before the Sales Tax Tribunal was dismissed. The main argument was that even if account books are rejected, assessing authorities must consider material evidence before making a best judgment assessment, citing relevant case laws.2. The Tribunal considered audit reports, survey reports, and other records after rejecting the account books. The taxable turnover disclosed by the assessee was Rs. 4,14,952, while the final determination was Rs. 5,40,000. The Tribunal did not grant exemption on the purchase of electric motors as the applicant supplied them separately from centrifugal pumping sets under a contract. The High Court found the Tribunal's reasoning erroneous, stating that the applicant was entitled to exemption on locally purchased electric motors sold within the state. The Court allowed the revision, modifying the Tribunal's order to grant the applicant exemption from U.P. sales tax on the sale of electric motors, with a direction to determine the tax amount accordingly.This judgment highlights the importance of considering material evidence in best judgment assessments and clarifies the entitlement to exemption on specific transactions based on contractual terms and local sales regulations.
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