Burden of proof in tax assessments: addition and penalty fail when the department cannot establish nexus with alleged purchases.

A taxing authority cannot sustain an addition or penalty on alleged inter-State purchases without first establishing the assessee's nexus with those transactions, especially where an earlier remand required that inquiry. The burden remains on the party asserting the fact, and a taxpayer is not required to prove a negative. Because the department did not prove the connection and the revisional authority ignored the earlier remand directions, the revisional order and fresh assessment were quashed and the matter was sent back for a fresh decision in line with those directions.

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Issues: Whether the assessing authority and revisional authority could sustain the addition and penalty without establishing the petitioner's nexus with the alleged inter-State purchases, and whether the matter had to be decided in accordance with the earlier remand directions.

Analysis: The earlier remand order required the assessing authority to enquire into and establish the nexus between the petitioner and the alleged purchases. The governing principle applied was that the burden lies on the party asserting a fact, and no one is required to prove a negative fact. In the absence of proof connecting the petitioner with the alleged purchases, the assessing authority could not shift the burden onto the petitioner and the revisional authority could not affirm the fresh assessment while ignoring its own earlier directions.

Conclusion: The impugned revisional order and the fresh assessment order were unsustainable and were quashed. The matter was remanded to the assessing officer for a fresh decision in accordance with the earlier remand directions.

Ratio Decidendi: Where a taxing authority has earlier directed an inquiry into nexus, the assessment cannot be sustained unless the department establishes the assessee's connection with the alleged transaction; a taxpayer is not required to prove a negative fact.

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