V SUBRAMANIAN Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) ALL these tax cases are preferred by one assessee by name subramanian in respect of assessment years 1973-74 to 1977-78. The common question that arises in all these cases is whether the wheat product sold by the assessee for all those assessment years in question is eligible for exemption as second sale or exigible to tax as first sale.

(2.) ORIGINALLY, the assessing officer accepted the case of the assessee that the turnover in question relates to second sales of wheat products and, granted exemption from the tax. However, on the basis of report received from Intelligence Department, the assessments for the years in question were reopened under section 16 of the Tamil Nadu General Sales Tax Act (hereinafter called "the Act") by the assessing officer. The main reason given by the assessing officer for reopening the assessment was that the seller, viz. , Vasavi & Co. , was not a registered dealer and was not traceable and, therefore, the assessee must be deemed as first seller in wheat products and, therefore, liable to pay tax. The assessing officer not only levied the tax but also levied penalty under section 16 (2) of the Act on the ground of non-disclosure of the turnover under taxable turnover. Aggrieved by the order of the assessing officer, the assessee preferred appeals to the Appellate assistant Commissioner, who confirmed the orders of the assessing officer. Still aggrieved, the assessee preferred second appeals to the Sales Tax appellate Tribunal. Before the Tribunal, it was contended that the assessee was not a manufacturer and he did not purchase the wheat products from outside the state. The assessee purchased the wheat products in question from M/s. Ganesh trading Company, Dindigul and M/s. Vasavi and Company and the purchases from both the dealers were bona fide and proper. The sale bills issued by those two dealers had passed through the check-posts and as such, the onus is on the revenue to establish that the assessee is the first dealer in wheat products. It was also contended that the goods had been purchased through brokers and the bills had been settled as and when the goods were delivered through brokers. The assessee should not be taxed simply because the department is not able to tax the first seller. It was further contended that there were several inspections during the years in question and the department had not been able to cite any evidence against the assessee or the bona fides of the assessee. The reopening of the assessment orders was attacked on the ground that the assessing officer had mechanically followed the Intelligence Wing Officer's report without himself applying his mind and deciding the case. Alternatively it was contended that as held by this Court in T. C. No. 55 of 1963 at least 50 per cent of the turnover should have been granted exemption on the ground of bona fide doubt. Before the Tribunal, a legal point was also raised regarding the jurisdiction of the assessing officer to proceed with the assessment when the detection was made by the Intelligence Wing. However, this legal point is not pressed before us. Therefore, we are not dealing with the same.