RAMANJANEYA GROUNDNUT FACTORY Vs. C T O KADIRI

JUDGEMENT

(1.) This batch of 11 appeals filed under section 23 of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as "the Act") arises out of the orders passed by the Commissioner of Commercial Taxes in identical terms under section 20(1) of the Act. These assessment years relate to 1983-84 to 1985-86. Five dealers doing business at Kadiri and Tanakallu, Ananthapur District, are the appellants in these appeals. By the impugned orders, the Commissioner set aside the common order dated 28/05/1990, passed by the Appellate Deputy Commissioner (C.T.), Kurnool, allowing the appeals filed by the appellants herein against the reassessment orders made by the Commercial Tax Officer, Kadiri, in March, 1990.

(2.) The relevant facts are these : The appellants during the relevant point of time were engaged in the business of purchasing groundnuts, decorticating the same and selling the resultant groundnut seeds to other dealers in the State. Groundnut is declared goods, taxable under section 6 read with Schedule III. The point of levy is as follows :

(3.) Thus, the appellants not being oil millers are not liable to tax the point of first purchase but the liability attaches to them if they are the last purchasers. In respect of the groundnut seeds sold to other registered dealers in the State, the appellants claimed exemption inasmuch as the appellants would not be last purchasers. The assessing authority allowed the exemption on a scrutiny of the accounts, bills and the affidavits filed from the purchasing dealers. In this exempted turnover, the purchase turnover corresponding to the sales effected to a registered dealer by name, M/s. P. Sudhakar Oil Mills, Kishanganj, Hyderabad, were also included. The affidavits filed by M/s. P. Sudhakar Oil Mills to the effect that they purchased the groundnut seed from the appellants and included the same in their turnover, are on record. About two years later, it appears that the assessing authority received a report from the Commercial Tax Officer, Osmanganj, according to which some of the sales said to have been made by the appellants were not accounted for by the said dealer and that he denied those transactions. We may mention at this stage the contents of the letter given by the proprietor of M/s. P. Sudhakar Oil Mills on 22/06/1989 to the Commercial Tax Officer, Osmanganj, Hyderabad. The said dealer furnished the details of purchases from 10 dealers. Out of them, excepting the appellants in Special Appeal Nos. 3 and 4 of 1994 (M/s. Manjunatha Groundnut Traders), the names of the other dealers figure in the letter. However, from the letter of the proprietor of M/s. Sudhakar Oil Mills, it is clear that he accounted for some of the transactions with respect to the other four appellants. We may also mention that the statement in the letter was only to the effect that out of 136 transactions regarding which enquiries were made by the Commercial Tax Officer, Osmanganj, only 25 transactions covered by purchase bills were entered in the books of account and the remaining were not entered. The letter does not contain any statement as to whether the disputed consignments of groundnut seed were in fact sold by the appellants and received by them. On the basis of the said statement, the assessments of the appellants were reopened by the assessing authority, who issued notices in November, 1989. It is stated in the show cause notices that M/s. P. Sudhakar Oil Mills did not account for the sales mentioned in the notices and also denied having purchased groundnut seed from the appellants. It was then stated in the notices that the affidavits of M/s. Sudhakar Oil Mills on the basis of which exemption was allowed were bogus ones and therefore the burden of proof shifted to the appellants to establish that they were not the last purchasers. Hence, it was proposed to disallow the exemption, already granted on the relevant transactions in exercise of powers under section 14(4)(cc) of the Act and to bring additional turnovers to tax. In reply to the notices, the appellants made an application to summon the proprietor of M/s. Sudhakar Oil Mills for the purpose of cross-examining him but the request was rejected by the assessing authority who reopened the assessment. The appellants also filed affidavits of the brokers said to have been engaged both by the appellants as well as M/s. Sudhakar Oil Mills in connection with the sale and purchase of groundnut seeds. The affidavits given by the brokers contain the details of way bill numbers, lorry numbers and the numbers of the bank drafts handed over by M/s. Sudhakar Oil Mills and received by them through their counterparts at Hyderabad. In some cases, a tabular statement furnishing the bill-wise and consignment-wise details with way bill numbers, vehicle numbers and details of bank drafts were filed. The assessing authority solely relying upon the letter of M/s. P. Sudhakar Oil Mills addressed to the Commercial Tax Officer, Osmanganj, confirmed the proposed reassessment. The assessing authority who passed the reassessment orders observed that the appellants failed to discharge the burden cast upon them to prove the genuineness of the transactions in dispute in rebuttal of the statement of the purchasing dealer. In the absence of proof to the effect that the purchasing dealer entered the transactions in his books of account and paid the tax thereon, the appellants became liable to pay the tax as last purchasers. It was further observed that the appellants did not produce any evidence to show that the proprietor of M/s. Sudhakar Oil Mills received the goods and that the way bills issued by the appellants did not furnish sufficient proof that the goods were actually received by the said dealer. With regard to demand drafts, he commented that the appellants could not furnish any evidence to show that the demand drafts were taken by the proprietor of M/s. Sudhakar Oil Mills with his own source of money.