Rajasthan High Court: Damaged Wheat Tax Exemption - Revenue Burden of Proof

The High Court of Rajasthan allowed the revision petition regarding the taxation of damaged wheat purchased for cattle feed. The court emphasized that while damaged wheat for cattle feed is exempt from tax, the burden of proof lies with the Revenue to establish taxable sale. It was noted that the assessing authority did not conduct a proper inquiry to determine if the wheat was used for cattle feed. The court set aside previous orders and remanded the case for a fresh decision based on proper evidence and in compliance with the law.

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Issues:
1. Interpretation of tax laws regarding the purchase of damaged wheat for cattle feed.
2. Burden of proof on the Revenue to establish taxable sale.
3. Application of legal precedents in determining tax liability.
4. Adequacy of evidence and independent inquiry by the assessing authority.

The High Court of Rajasthan heard a revision petition concerning the taxation of damaged wheat purchased for cattle feed. The petitioner argued that the damaged wheat was exempt from tax as cattle feed under a specific notification. Citing a Supreme Court case, the petitioner contended that such damaged wheat used as cattle fodder should not be taxed. The respondent, representing the Revenue, claimed that the petitioner failed to provide evidence to support the exemption. The court noted that while damaged wheat for cattle feed is exempt, it must be proven that the wheat was indeed used for that purpose. The assessing authority did not conduct a proper inquiry to establish this fact. The court emphasized that the burden of proof lies with the Revenue to demonstrate taxable sale, and mere absence of documents from the assessee does not justify tax imposition. Referring to a Supreme Court case with similar circumstances, the court highlighted the need for a detailed inquiry into the transactions. Consequently, the court allowed the revision petition, setting aside previous orders and remanding the case to the assessing authority for a fresh decision based on proper evidence and in accordance with the law.

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