Purchase tax and double taxation claim required fresh verification before the assessment could be sustained

Levy of purchase tax on purchases from unregistered dealers could not be sustained on the existing record where the assessee contended that the same turnover had already been included in deemed sale value and taxed. The dispute turned on verification of returns, annexures and audit records, and the Tribunal had not examined that factual aspect. As correct turnover alone can be taxed and double taxation is impermissible, the matter required fresh scrutiny before liability could be affirmed. The assessment was therefore remanded to the Assessing Officer for reconsideration and verification of whether the turnover had already suffered tax.

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Issues: Whether the levy of purchase tax on purchases from unregistered dealers was sustainable when the assessee contended that the same turnover had already been included in the deemed sale value and taxed, and whether the matter required remand for fresh verification.

Analysis: The revision turned on a factual controversy as to whether the purchases from unregistered dealers had already formed part of the deemed sale turnover shown in the returns and audit records. The record before the Court showed that the first appellate authority had accepted the assessee's case on verification of the annexures and audit report, while the Tribunal had not examined that factual aspect. Since correct turnover alone can be taxed and a dealer cannot be subjected to double taxation, the existing records required scrutiny before sustaining the demand.

Conclusion: The demand could not be finally upheld on the existing material, and the matter had to be remanded to the Assessing Officer for fresh consideration and verification.

Ratio Decidendi: Where a tax demand depends on verification of whether the same turnover has already suffered tax and the factual record is unclear, the assessment must be reopened for fresh scrutiny rather than sustained without proper examination.

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