2014 (2) TMI 299 - HC - VAT and Sales Tax

High Court upholds Sales Tax Tribunal's decision denying second sale exemption for 1983-84 & 1985-86.

The High Court of Madras upheld the Sales Tax Appellate Tribunal's decision to deny the second sale exemption claim for the assessment years 1983-84 and ... Sales exemption - Whether in the facts and circumstances of the case, the Tribunal was legally justified in interfering with the orders of the First Appellate Authority by allowing the claim of second sale exemption when the assessee failed to establish the entries of the bills supporting the alleged purchase of goods from the registered dealers - Held that:- Going through the order of assessment as well as the order passed by the Appellate Authority, when the assessee had acted on the representation of the vendors and that at least in one case, the registration itself was cancelled subsequent to the assessment order, we do not find any justifiable ground to interfere with the order of passed by the Sales Tax Appellate Tribunal - Decided against Revenue. Issues:- Interpretation of second sale exemption claim in sales tax assessment for assessment years 1983-84 and 1985-86.Analysis:The High Court of Madras heard a revision by the Revenue against the Sales Tax Appellate Tribunal's order related to the assessment years 1983-84 and 1985-86. The main question of law was whether the Tribunal was justified in allowing the claim of second sale exemption when the assessee failed to provide evidence of purchase from registered dealers. The assessee, a dealer in pulses, faced scrutiny as the sellers listed on purchase bills were found to be dealing in different commodities. The Appellate Assistant Commissioner upheld the assessment, denying the second sale exemption due to lack of taxable transactions. The assessee then appealed to the Sales Tax Appellate Tribunal, arguing that certain sellers had misled them, requesting the benefit of the doubt.The Tribunal, after reviewing the documents and circumstances, decided that the entire purchase by the assessee did not qualify for a second sale exemption. Referring to a previous decision, the Tribunal determined 50% of the turnover as first sales, limiting the exemption on second sales to 50%. The Revenue appealed this decision, but the High Court upheld the Tribunal's ruling. The Court noted that the assessee had relied on the vendors' representations, and in one instance, a vendor's registration was canceled after the assessment. Consequently, the Court found no grounds to interfere with the Tribunal's decision, confirming the order and dismissing the Tax Case Revisions without costs.