TaxTMI 
TaxTMI 
2021 (12) TMI 670
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.... sells its products through direct payment or payment against hundies payable on due date with the bank by such wholesalers. Respondent-defendant No. 1 was a wholesale dealer of the appellant company in the territory of Delhi since 1984 and was purchasing paper from the Delhi Sales Office of the appellant as well as from its mills situated at Saharanpur. The tentative stock lifted by respondent no. 1 was worth Rs. 15-20 lakhs per month. The respondents were making regular payments and were enjoying immense confidence of the appellant. The appellant further explained the terms of the payment in the plaint filed. The terms of the sale of paper to respondent No. 1 were stated to be through limited credit of 45-60 days as well as through hundi documents. Fifteen days interestfree credit facility from the date of delivery was available and thereafter interest was charged. Any default of payment carried interest @ 21 % p.a. from the date of delivery till the date of payment and further penal interest @ 3 %. 3. The Respondent No. 1 lifted huge stocks in the month of November 1985 to January, 1986 but did not make the due payments. Even some of the hundi documents were dishonored. The app....
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....t was Nil. Thus, there was a net tax saving of the value of the goods sold in the open market at Delhi. There is no sales tax leviable on the sale of paper from the Dealer to Dealer at Delhi. If the sales were made directly from Saharanpur the Sales Tax leviable was 4%. The dealer to dealer transaction of sale did not attract payment of anysales tax whatsoever at Delhi. The Plaintiff in addition to making profit by sale of paper in the open market at the price higher than the Mill price also wanted to pocket the sales tax which would have ordinarily been payable had the sales been made from their Mills at Saharnapur. This whole ingenious scheme and device was tainted with fraud and the Jaipuria under undue influence and coercion were made to submit to the illegal transactions which were indulged in by the Bajorias/Plaintiff." 5. One of the issues framed after completion of pleadings was whether the alleged bills forming the claim in the suits have been raised on the basis of the fictitious and fraudulent transactions. The suit has been dismissed by the Division Bench on such issue inter-alia on the ground that documents had not been proved by summoning the person, who had issued ....
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....nts pertaining to transactions in question have not been filed. He denied that the respondents had not paid a sum of Rs. 2,72,08,398.29 to the plaintiff between the period 1.5.1985 to 19.3.1987. In respect of signatures on ST-1 Form, he deposed that he used to sign such forms under duress and bear his signatures. 8. On the basis of the evidence led, the learned Single Bench decreed the suit. However, the first appeal was accepted inter alia on the ground that the appellant has failed to prove that it was registered as a dealer with the Sales Tax Authorities in Delhi and it failed to prove having any godown in Delhi. Since the appellant has failed to prove that it was a registered dealer, it could not effect any sale of paper at Delhi without paying Central Sales Tax. The Division Bench of the High Court held as under: "31. We may summarize. The respondent No.1 has failed to prove that it was registered as a dealer with the Sales Tax Authorities in Delhi. It failed to prove having any godown at Delhi. As per the laws applicable to Sales Tax, unless respondent No.1 proved being a dealer registered at Delhi, it could not effect any sale of paper at Delhi without paying Central Sale....
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....ave heard learned counsel for the parties and find that the Division Bench of the High Court has gravely erred in law in accepting the appeal of the respondents on wholly erroneous and untenable grounds. Each of the invoices produced bears the registration No. S.T. No. 36/102499/08/84 and also bears the stamp and signatures of the Managing Director/ Director of the respondents. Apart from such invoice, the appellant has proved the debit note which has also been stamped and signed by the Managing Director/ Director. The ST-1 Form also bears the stamp and signature of the Director of the respondents. Such ST-1 Form bears the invoice number and the date as well as the value of the goods. The witness of the respondent has admitted his signatures on the ST-1 Form, invoice and debit notes. The respondent company has only denied the signatures of its representative only on the Delivery Challan. 13. The judgments referred to by the learned counsel for the respondents are not applicable in the present case. The respondents have alleged that the alleged bills have been raised on the basis of fictitious and fraudulent transactions. Since such stand was of the respondents, the onus of proof o....
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....lord and tenant. It was the defendant who has not produced his books of accounts to show that he was paying various amounts as rent to the appellant every month. In these circumstances, the extract of accounts produced by the respondent was found to be unbelievable and the suit decreed. In fact, the respondents in the written statement itself denied that they do not have the account books as they got damaged in rain and eaten by pests when they were kept on the roof of a building during the process of reconstruction. Such defence on the face of it appears to be made up defence. The account books were not produced by the respondents to discharge the onus on them. Therefore, the adverse inference had to be drawn against the respondents rather than against the appellant who are not relying upon the entries in the account books alone to maintain suit but reliance is on the invoices, debit note as well as ST-1 Form which had been issued only after the receipt of goods. Though the respondents have denied the receipt of goods but the receipt of goods is proved by numerous documents stamped and signed by the respondents. 17. Section 4(2)(a)(v) of the Delhi Sales Tax Act, 1975 excludes the....
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....y a dealer to a dealer that the sales tax is not be payable as the incidence of payment of tax would be when the goods are sold to a consumer. The respondents as wholesaler, were getting the benefit of trade discount, which is an agreed term of sale. 20. The High Court, in the impugned judgment erred in holding that the appellant had not examined the author of the documents. Such reasoning is absolutely erroneous as in the written statement, the respondents had not denied their signatures on the documents referred to by the appellant but pleaded duress in executing of these large number of documents. The witness examined by respondent no.1 in his cross examination admitted his signature or that of the representative of company on invoices, debit notes and on ST-1 Form. The respondent had led no evidence in respect of fraud or duress apart from self-serving statement. The consignment of goods was sent from the month of November 1985 to January 1986. The respondent had signed large number of documents during this period. However, no complaint was made to any person or authority or even to the plaintiff. It is a denial of receipt of goods without any basis raised only in the written ....