By G. G. Goyal, Janak Vaghani Chartered Accountants
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Sales Tax – Deduction Claimed Based on Declaration Furnished By Purchasing Dealer – Whether Form Genuine or Conditions Complied With- Burden of Proof – Not on Selling Dealer. Sections 4(3)(a)(v), 50 (1)(a), 56(2) of The Delhi Sales Tax Act, 1975.
FACTS
The appellant engaged in business of manufacture of ghee and milk powder of different kinds in its factory at Patiala and having its offices all over India. The appellant had sold goods against form ST-1, in Delhi, and claimed deduction from payment of tax u/s. 4(2) (a)(v) of the Delhi Sales Tax Act. In assessment the claim of deduction was disallowed and confirmed by the Tribunal. The appellant filed appeal before The Delhi High Court against the impugned order of the Tribunal.
HELD
The Tribunal appeared to have placed the burden wrongly upon the appellant dealer. It is not the burden of the selling dealer to show that the declarations in form No ST-1 were not spurious or were genuine or that the conditions to which the forms were issued to the purchasing dealer by the department were complied with. The burden will shift to the selling dealer only if it is shown that the selling dealer and the purchasing dealer had acted in collusion and connived with each other to evade tax by obtaining spurious forms of deduction. The claim was disallowed in assessment due to certain discrepancies between form ST-1 and the accounts given by the purchasing dealers in form ST-2 or colour of form was different. This was not for the selling dealer to explain. The fact of different colour of form gave rise to the suspicion that the forms are not genuine could be a starting point for further inquiry but by itself does not establish any guilt on the part of the selling dealer. There appears to have no further query conducted by the sales tax authorities to show that the forms are spurious; neither is there evidence to show that the appellant was in any was connected with the alleged fraud committed by the purchasing dealer. Accordingly, the High Court allowed the appeal filed by the appellant.
