NANDLAL RAMESWARDAS Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS TRC arises out of the order of the Sales Tax Appellate Tribunal in T.A. No. 875 of 1989 rejecting the petitioner's appeal in so far as the turnover of Rs. 3,83,560.40 representing the sales of cotton yarn waste is concerned. The relevant assessment year is 1985 -86. At the relevant point of time, cotton yarn waste was taxable at the point of last sale. It is the case of the petitioner that he sold cotton yarn waste to other registered dealers who furnished declarations to the effect that they being next sellers, were liable to pay the tax. It is the further case of the petitioner that he filed affidavits of four buyers before the Appellate Deputy Commissioner in addition to the declarations filed by him already before the assessing authority. It is also the stand taken in paragraph 3 of the Memorandum of Revision Petition. Copies of affidavits sworn to by the partners of four firms viz., Kumar Industries, Jay Surgicals, Madhavi Enterprises and Venkateswara Trading Company have been placed before us. In those affidavits it is stated that the cotton yarn waste purchased from the petitioner has been sold to other dealers or consumers within the State and that therefore they would be last sellers of the cotton yarn waste purchased from the petitioner. In the assessment order, exemption was disallowed on the ground that the cotton yarn waste was sold to manufacturers and being manufacturers, they would have consumed the goods without effecting resale. But it is not mentioned in the order that any enquiries were made as to whether the buyers or manufacturers utilised the goods themselves without effecting resale. Moreover, the effect of declarations, if any filed, were not considered by the assessing authority. As laid down in Shaw Khemchand Deepchand & Co vs. State of A.P. : 53 STC 397 the Department must establish that the cotton yarn sold by the dealer was either consumed by the purchasers or consigned or exported outside the State and unless the department so establishes, the claim of the dealer that he is not the last seller cannot be negatived. No doubt, if the information gathered by the department reveals that the purchasing dealer is a manufacturer who in the normal course of manufacturing operations utilises the cotton yarn, that forms presumptive evidence that the cotton yarn was consumed by the manufacturer. But, it is not known whether any such information was obtained or any inquiries as to the truth of the declarations filed were made in this behalf. Before the appellate authority, the claim as regards two dealers viz., Binjusaria Metal Box Company and Kapadia Oil Mill was given up. As far as a turnover of Rs. 38,647/ - pertaining to the 2 dealers, it was admitted that the goods were consumed by the dealers and therefore the petitioner will be last seller to the extent of that turnover. But as regards four others, as we already stated, the affidavits were filed before the appellate authority according to the version of the petitioner, which fact is not rebutted by the department by placing before us the relevant records. The first appellate authority merely reiterated what the assessing officer has said. The Tribunal also did not advert to the declarations and affidavits and approached the question from the angle projected by the Division Bench in the decision aforementioned. The Tribunal merely observed thus:

(2.) WHETHER there was information in the assessment record that the buyers were manufacturers and whether the affidavits said to have been filed by the petitioner were correct, had not been adverted to by the Tribunal at all. We do not think that the petitioner -assessee would have o(sic)tted to raise an important contention that the declarations and affidavits were not considered by the first appellate authority. In fact, the grounds of appeal filed before the Tribunal indicate that specific ground was taken to the effect that the declarations and affidavits were not considered. In these circumstances, we are of the view that the Tribunal should have a fresh look into the matter and pass fresh orders. The order of the Tribunal in so far as the disputed turnover of Rs. 3,65,030.40 ps. is concerned, is set aside and the Tribunal is directed to pass a fresh order after duly considering the material on record. We make it clear that no fresh evidence shall be permitted to be adduced before the Tribunal. The TRC is allowed to the extent indicated above. No costs.