TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 608
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee was entitled to second sale exemption. 2. The assessee herein carries on business in polythene films and granules. It claimed second sales exemption of plastic granules to the extent of Rs.34,36,283/-. The Assessing Officer found that the purchase to the tune of Rs.25,18,068/- alleged to have been made by Sudarsan Enterprises, 3, West Mada Street, Thiruvottiyur and S.R. Enterprises, Kumaran Street, Kamaraj Nagar, Madras, were not genuine purchases, since the dealers were not in existence carrying on business at the addresses given in the A9 returns of the assessee. It was also contended that the registration certificates in respect of the above concerns were also cancelled by the concerned registering authority. In the circumstances, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....introduced by Brij Khandelwal, who was operating the account, the statement of accounts was signed by one Rajendra Kumar, Managing Director of the assessee firm. Another statement of account for the period 15.4.1993 to 20.11.1993 was signed by S.Kumar, Proprietor of Sudarsan Enterprises. It was also signed by the Managing Director of the assessee company. A stamped receipt dated 26.4.1993 was signed by one Ram in the capacity of Proprietor of Sudarsan Enterprises for the receipt of a sum of Rs.1,00,000/- from the assessee company. It is stated that the said person viz., Ram, had also signed Invoice No.22 dated 12.10.1993 of S.R.Enterprises and the other fictitious dealer. Thus, the invoice issued by Sudarsan Enterprises as well as S.R.Enter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rsan Enterprises was closed. A verification of the account in the Central Bank of India reveals that the cheque payment for and on behalf of S.R.Enterprises was withdrawn immediately. Going by the materials thus available, the assessment was made. Apart from that, penalty was also levied on the assessee. 6. On appeal before the Appellate Assistant Commissioner, the Appellate Authority pointed out that at the time of hearing the appeal, the assessee produced copies of purchase bills for the purchase of plastic granules from the registered dealers, and in which, the registration certificate under the Tamil Nadu General Sales Tax Act as well as the Central Sales Tax Act, were noted. 7. The Appellate Authority pointed out that the assessee pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce of the concern from which the assessee had purchased the taxable goods in respect of which the second sale exemption was claimed is in serious doubt and when the assessee had not cleared that doubt, on the facts stated in the assessment order, the Tribunal as well as the Appellate Assistant Commissioner committed a serious error in holding that the assessee had produced registration certificates and the invoices to substantiate about the anterior taxable sale from existing persons. He pointed out that when the claim of the assessee that the payments were made through account payee cheques were found to be unacceptable by reason of the admission of the assessee that they had made purchases from Brij Khandelwal, whereas the invoices were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cellation or purchase from unregistered dealers, as such, may not stand in the way of grant of an exemption. However, it is totally a different matter for consideration that when there was absolutely no material to substantiate that the materials were purchased from existing persons and that there was, in fact, a sale and a transfer of property of goods, the burden that the sale from existing persons did take place, ought to have been discharged by the assessee. There is no gainsaying in the contention of the assessee that a mere reference to the name of the seller would result in the discharge of the onus and that it was for the Revenue to prove that there was no sale. 12. A perusal of the order of assessment clearly pointed out the contr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ccepting the case of the assessee to grant exemption, as had been done by the Tribunal and the Appellate Assistant Commissioner. As already pointed out, the Appellate Assistant Commissioner proceeded to accept the case of the assessee solely on the ground that the invoices produced through S.R.Enterprises and Sudarsan Enterprises carried the registration number and that the purchases were made much prior to the cancellation of the registration certificate. The Tribunal also held so. With the burden of proof on the issue not discharged by the assessee as to the sale of goods in his favour, on the admitted case that it was only Brij Kandelwal who had had the transaction with the assessee, the Tribunal as well as the Appellate Assistant Commis....