Burden of proof in tax assessment stays with the Department when seized material is unproved and transactions are denied.

Assessment based on alleged seized material from mobile squads could not be sustained where the assessee denied the transactions and the Department failed to prove the documents. The Court held that the burden of proving such material remained on the Department, and it could not be shifted to the assessee merely because the papers were received through mobile squads. Section 16 of the U.P. Value Added Tax Act, 2008 did not apply, because the alleged transactions were not shown to be facts within the assessee's special knowledge. The Tribunal's order sustaining tax liability on that basis was therefore unsustainable, and relief was granted to the assessee.

---

---

Issues: Whether the Tribunal's order sustaining rejection of the books of accounts and tax liability based on materials allegedly seized by mobile squads, without proof of those materials, was legally sustainable, and whether the burden of proof could be shifted to the assessee under Section 16 of the U.P. Value Added Tax Act, 2008.

Analysis: The assessment rested on material forwarded by mobile squads, but the assessee denied the transactions. The reduction of turnover by the first appellate authority and the Tribunal was not supported by any finding explaining how the quantum was determined. The burden to prove the seized material remained on the Department, and it could not be shifted to the assessee merely because the documents were received from mobile squads. The Court held that the alleged transactions were not shown to be within the special knowledge of the assessee so as to attract Section 16. The failure of the Department to prove the seized documents meant that tax liability could not be fastened on that basis.

Conclusion: The Tribunal's order was unsustainable. The revisionist-assessee was entitled to relief, and the question of law was answered in favour of the assessee and against the Department.

Ratio Decidendi: In assessment proceedings, where the Department relies on unproved seized material and the assessee denies the alleged transactions, the burden remains on the Department to prove such material, and the special burden provision for facts within the assessee's knowledge does not apply.

---