RAMPRASAD TORMAL Vs. STATE OF ORISSA

JUDGEMENT

(1.) THESE are eight references made by the Member, Sales Tax Tribunal, Orissa, under section 24 (1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as the Act) on the application of the assessee who is a wholesale textile dealer dealing in mill-made cloth. While submitting his taxable turnover for the purchases covered by these references, he claimed certain sums as permissible deductions under section 5 (2) (A) (a) (ii) of the Act being sales to registered dealers of goods intended for resale in Orissa. The Sales Tax Officer suspected the genuineness of the declarations furnished by the assessee and called upon him to produce the purchasing dealers from whom he is said to have obtained declarations in support of such claim. But the assessee pleaded his inability to produce them. The assessing officer therefore held that the declarations furnished by the assessee are not true and correct as required under rule 27 (2) of the Orissa Sales Tax Rules, 1947, and refused to allow the deductions claimed. On appeal by the assessee, the Assistant Commissioner, Sales Tax, was of the view that since the assessee had obtained signatures of the purchasing dealers in his presence, he was not in a position to believe that the signatures given in the declarations were fictitious. In this view of the matter, he allowed the deductions claimed. On appeal by the State before the Tribunal, the latter was of the view that if the department finds that the assessee-dealer had obtained declarations from fictitious dealers, the assessee is to be given a chance to prove that the dealers were not fictitious or that he acted bona fide and was deceived by the fictitious-dealers and that unless the assessee proves such bona fide action on his part or in the alternative, the alleged dealers are genuine dealers, he cannot claim deductions in respect of sales of such dealers. Applying these principles to the facts of the cases before him, he held that as the assessing officer suspected that the purchasing dealers were fictitious persons, he gave a chance to the assessee to prove his bona fides and as the assessee has failed to prove his bona fides, the Sales Tax Officer was right in disallowing the deductions claimed. He, therefore, set aside the order of the Assistant Commissioner and restored that of the Sales Tax Officer disallowing the deductions. The State, thereafter, filed an application under section 24 (1) of the Act before the Tribunal praying to refer three questions of law which arise from out of the order of the Tribunal for determination by this court. The first question raised a point of law which is already covered by the decision of this court in H. E. H. Jamal Noor Mohammad & Co. v. State of Orissa (I. L. R. 1963 Cutt. 517) and the second one involved a question of fact. He, therefore, disallowed those two questions and referred the third one to this court. That question is in the following terms :-

(2.) WE may quote here the relevant provisions of the Act under which the deductions in question are claimed and they are section 5 (2) (A) (a) (ii) of the Act and rule 27 (2) of the Rules. Section 5 (2) (A) (a) (ii) is in the following terms :

(3.) AS stated earlier, the burden is always on the assessee to prove that a declaration on which he relies for claiming exemption under section 5 (2) (A) (a) (ii) of the Act as genuine. The person whose name appears as the purchasing dealer in the books of accounts of the assessee may be a genuine person and may be dealing in the goods mentioned in the certificate of registration; none the less, the assessee might not have sole any such goods to him, but might bring into existence a forged declaration purporting to have been signed by the purchasing dealer. If a question arises regarding the genuineness of the declaration, it is for the assessee to establish before the assessing officer that the declaration on which he relies is a genuine declaration. Apart from the fact that the assessee has failed to prove this onus which lay on him, although an opportunity was given to him by the assessing authority, it also follows from the finding of the Tribunal that the so-called purchasing dealers are fictitious persons and the declarations in question cannot be genuine.