2002 (12) TMI 620

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....or the assessment year 1985-86, it reported a total and taxable turnover of Rs. 2,13,38,399/-. It is the case of the petitioner that the petitioner purchased Potassium Chloride for an amount of Rs. 69,991-25ps, Rs. 1,40 ,325/- and Rs. 6,34,900/- from three registered dealers and used it in the manufacture of Potassium Chlorate. Since the purchases were made from registered dealers under the Act, the petitioner was not liable to pay tax. Originally, the Assessing Officer granted exemption as claimed on such purchases. However, pursuant to the inspection dated 10.9.1987, the original order was revised on the above said turnover of purchases of Chloride made from (i) Industrial Chemicals (ii) Selva agency and (iii) Mani Agency on the ground th....

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....n such circumstances, it is for the Department to collect the tax from the selling dealers and mulcting the liability on the petitioner is not correct. 4. On the other hand, the learned Government Pleader submitted that the very point has been considered by the authorities as well as the Special Tribunal in the revision and appeal under the provisions of the Tamil Nadu General Sales Tax Act. The fact finding authorities ultimately found that the selling dealers were not in existence and the petitioner has produced only bills from non-existing dealers. It was also found on fact that the selling dealers neither carried on business nor handled the goods and the addresses given were bogus. When the petitioner claims that it is entitled to th....

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....gistration certificate of the first dealer was cancelled during the assessment year in question or immediately before the purchase by the dealer, namely the second seller. However, the dealer (second seller) must establish that the first sale was a taxable sale; whether the tax had been paid by the first seller or not is not the concern of the dealer (second seller). The Revenue cannot take advantage of the fact of cancellation of the registration certificate of the first seller either on his application or otherwise, without further investing as to whether the bills issued by such seller were real or bogus bills. In the event of the Revenue establishing that the bills produced by the dealer (second seller) are bogus and were not really iss....