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The State of Tamil Nadu Vs. A.R. Duraisamy Chettiar and Brothers - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Case (Revision) No. 1645 of 1984
Judge
Reported in[1986]61STC360(Mad)
AppellantThe State of Tamil Nadu
RespondentA.R. Duraisamy Chettiar and Brothers
Advocates:K.S. Bakthavatsalam, Additional Government Pleader
Cases Referred and Deputy Commissioner (C.T.) v. Vijayalakshmi Mills Ltd.
Excerpt:
- .....assessee. according to the revenue, since the sellers though registered have not paid tax on their sales the assessee cannot have the benefit of second sales with regard to the said turnover. referring to the decisions in govindan & company v. state of tamil nadu [1975] 35 stc 50, deputy commissioner (c.t.) v. vijayalakshmi mills ltd. [1977] 40 stc 463 and state of tamil nadu v. chamundeswari enterprises [1983] 52 stc 124, the tribunal held that it is not for the assessee, who is the subsequent seller, to show that the first sale has been taxed, that the onus on the subsequent seller is only to point out that there has been an earlier sale in the state and that the onus is not on the assessee to show that the first sale has in fact suffered tax. though the said decision has been.....
Judgment:

Ramanujam, J.

1. In this tax case filed by the State, the decision of the Tribunal holding that the turnover of Rs. 1,86,912 represents second sales and therefore the same is not taxable has been challenged before us. The case of the assessee as regards the said disputed turnover is that all his sellers were registered dealers in the State and therefore their sales alone are taxable and not the sales of the assessee of the same goods, which amounts to second sales in the State. It has not been disputed by the revenue that the sellers of the assessee are registered dealers and they have also issued sale bills for the sales to the assessee. The assessee claims exemption in relation to the said turnover which according to it represents second sales effected by the assessee. According to the revenue, since the sellers though registered have not paid tax on their sales the assessee cannot have the benefit of second sales with regard to the said turnover. Referring to the decisions in Govindan & Company v. State of Tamil Nadu [1975] 35 STC 50, Deputy Commissioner (C.T.) v. Vijayalakshmi Mills Ltd. [1977] 40 STC 463 and State of Tamil Nadu v. Chamundeswari Enterprises [1983] 52 STC 124, the Tribunal held that it is not for the assessee, who is the subsequent seller, to show that the first sale has been taxed, that the onus on the subsequent seller is only to point out that there has been an earlier sale in the State and that the onus is not on the assessee to show that the first sale has in fact suffered tax. Though the said decision has been challenged before us, we are not in a position to interfere with the order of the Tribunal as it is consistent with the view uniformly taken by this Court on the said issue. Whenever the assessee shows that his sale is second sale and that the sale by his vendor is the taxable sale, the assessee is entitled to claim exemption on the ground of second sales, even though the earlier sale has not been taxed within the State. In this case, the assessee has shown that he has purchased the commodities from a registered dealer, who had issued necessary sale bills for the sales. Once the purchase is shown to have been from the registered dealer, then it is for the revenue to proceed against that dealer in respect of the sales effected by them which are first sales, and it is not for the assessee to show that the dealer's sale has in fact suffered tax for getting the benefit of the concession towards second sales.

2. In Govindan & Company v. State of Tamil Nadu [1975] 35 STC 50 this Court held as follows :

'To claim the benefit of tax on the ground that the sales effected by the assessees are second sales, the assessees need not show that their sellers have in fact paid tax. It is enough for them to show that the earlier sales are taxable sales and that the tax is really payable by their sellers.'

3. In State of Tamil Nadu v. Chamundeswari [1983] 52 STC 124 this Court observed as follows :

'The learned counsel for the revenue contends before us that the assessee must, for getting exemption in relation to his sale, not only show that his sale was not the first sale but also prove that the first sale has suffered tax in the State. We are not inclined to accept this proposition of law as correct. If the sale effected by the assessee is not the first sale, then under the provisions of the Act that sale cannot be brought within the net of taxation and it is for the revenue to search the first seller and levy tax on the first sale. It is not for the assessee, who is the subsequent seller, to show that the first sale has been taxed. Once it is found that the assessee's sale is a subsequent sale and there has been a first sale in respect of the same goods earlier in the State, then it is for the authorities to proceed to levy that transaction of first sale, and the onus cannot be thrown on the assessee to show that the first sale has suffered tax. The onus on the subsequent seller is only to point out that there has been a first sale and the onus is not on him to show that the first sale has, in fact, suffered tax. This is the view this Court has taken in two earlier decisions reported in Govindan & Company v. State of Tamil Nadu [1975] 35 STC 50 and Deputy Commissioner (C.T.) v. Vijayalakshmi Mills Ltd. [1977] 40 STC 463.'

4. Having regard to the said decisions of this Court, the Tribunal's decision does not call for interference and the tax case is therefore dismissed.


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