Burden of proof for tax exemption fails where purchases are unverifiable and selling dealers are found non-existent.

A dealer claiming tax relief on turnover of oil on the basis of local purchase and non-manufacture had to prove the foundational facts supporting that claim. The dealer failed to produce account books and could not verify purchases from identifiable, existing sellers; the named selling dealers were found non-existent. As the source of the purchases was a matter within the dealer's special knowledge, the burden under section 12A of the U.P. Trade Tax Act, 1948 lay on the dealer to substantiate the exemption claim. Failure to prove verifiable purchases defeated the plea for relief, and the Tribunal's acceptance of the dealer's version was held unsustainable.

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Issues: Whether the dealer was entitled to avoid tax on the turnover of oil on the plea of local purchase and non-manufacture or non-import, when the alleged purchasing dealers were found non-existent and the account books were not produced.

Analysis: The dealer failed to produce account books and did not substantiate the plea that the oil had been purchased locally from identifiable and existing dealers. The authorities found that the named selling dealers did not exist and that the alleged purchases were not verifiable. In such a situation, the fact as to from whom the purchases were made was within the special knowledge of the dealer, and the burden under section 12A of the U.P. Trade Tax Act, 1948 lay on the dealer to prove the claim. A claim to exemption or relief cannot succeed unless the foundational facts necessary to attract it are proved by the assessee.

Conclusion: The dealer was not entitled to the claimed tax relief, and the Tribunal was wrong in setting aside the first appellate order and in accepting the dealer's version.

Final Conclusion: The revision was allowed, the Tribunal's order was set aside, and the first appellate authority's order was restored.

Ratio Decidendi: Where the assessee's claim to exemption or non-liability depends on facts within its special knowledge, the burden of proving those facts lies on the assessee, and failure to prove verifiable purchases defeats the claim to relief.

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