Statutory set-off on tax-paid purchases: buyer need not prove seller's actual tax remittance once bills are produced.

For statutory set-off on tax-paid raw material and incidental goods purchased from a registered dealer, production of the relevant bills is sufficient for the purchasing dealer to discharge the initial burden. The purchaser is not required, as a condition precedent to set-off, to prove that the selling dealer actually remitted the tax. If doubt remains whether tax was in fact suffered, the assessing authority must make the necessary enquiry. The approach is supported by the scheme of the Act, including the definition of tax-paid goods, and by the principle of single-point taxation.

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Issues: Whether, for claiming set-off on tax-paid raw material and incidental goods purchased from registered dealers, the assessee was required to prove that the selling dealers had actually paid tax.

Analysis: Section 8(1)(a) of the M.P. General Sales Tax Act, 1958 grants set-off where a registered dealer purchases tax-paid raw material or incidental goods for manufacture. The definition of tax-paid goods in section 2(rr) and the scheme of the Act show that once the purchase is made from a registered dealer and supporting bills are produced, the purchasing dealer discharges his burden. If any doubt remains about whether tax was in fact suffered, the assessing authority must make the necessary enquiry. The purchasing dealer cannot be compelled to prove, as a condition precedent to set-off, that the selling registered dealer has actually remitted the tax. The principle of single-point taxation also supports this approach.

Conclusion: The assessee was not required to prove actual payment of tax by the selling registered dealers and was entitled to the set-off.

Ratio Decidendi: For claiming statutory set-off on tax-paid goods purchased from a registered dealer, production of the relevant bills by the purchasing dealer is sufficient to discharge the initial burden, and the onus shifts to the revenue to verify any doubt about tax payment by the seller.

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