GOPIRAM BHAGWAN DASS Vs. STATE OF BIHAR

JUDGEMENT

(1.) The appellant in these appeals is a registered dealer under the Bihar Sales Tax Act, 1947.The assessment order relating to the year 1958-59 was made on 31st May, 1962. That is governed by the provisions of the aforesaid Act and has given rise to Civil Appeal No. 576 of 1967. The assessment order in respect of the year 1959-60 was also made on the same date but that is governed by the provisions of the Bihar Sales tax Act, 1959 which came into force on Ist July, 1959. However, the points are common and the provisions of the two statutes do not materially affect the decision of the appeals.

(2.) While showing his total turn-over, the assessee had sought to deduct certain amounts on the ground that sales to registered dealers had been made. The assessee produced declarations for all these sales to registered dealers. The Additional Superintendent of Sales Tax who made the order of assessment disallowed deductions claimed on account of sales, to certain registered dealers on the ground that those dealers were bogus and had not been shown to be genuine. It was observed that the assessee had failed to exercise the required degree of diligence and had not taken adequate steps to satisfy that the transactions were with genuine dealers. It was held that the declarations could not be said to be true as required under Rule 18 of the Bihar Sales Tax Rules, 1949.

(3.) The assessee filed appeals to the Appellate Commissioner of Sales Tax. It was argued before him that in the presence of the declarations as required under the law, there was absolutely no ground for disallowing the deductions which had been claimed. It was stated that the firms, in question, were in existence and had furnished valid declarations at the time of the transactions and even if it was found that they did not exist on a subsequent date, the deductions could not be disallowed. The Appellate Assistant Commissioner did not find that the dealers to whom the sales had been effected had not been registered or that the valid declarations as required by Rule 18 had not been filed. All that was held was that there was no evidence on the record to suggest that the assessee had exercised ordinary prudence in trying to find out as to whether the purchasing dealers were firms in existence. The appeal was consequently dismissed but certain penalty which had been imposed by the original assessing authority was set aside.