@JUDGMENTTAG-ORDER
K. Raviraja Pandian, J.@mdashIn this writ petition, the order dated 4.12.2000 made in Tax case (Appeal) No.2455 of 1997 by the Tamil Nadu
Taxation Special Tribunal is challenged.
2. The petitioner is a registered dealer under the Tamil Nadu General Sales Tax Act, (hereinafter referred to as ""the Act"".). For the assessment
year 1985-86, it reported a total and taxable turnover of Rs.2,13,38,399/-. It is the case of the petitioner that the petitioner purchased Potassium
Chloride for an amount of Rs.69,991-25ps, Rs.1,40,325/- and Rs.6,34,900/- from three registered dealers and used it in the manufacture of
Potassium Chlorate. Since the purchases were made from registered dealers under the Act, the petitioner was not liable to pay tax. Originally, the
Assessing Officer granted exemption as claimed on such purchases. However, pursuant to the inspection dated 10.9.1987, the original order was
revised on the above said turnover of purchases of Chloride made from (i) Industrial Chemicals (ii) Selva agency and (iii) Mani Agency on the
ground that the three selling dealers have not paid tax. The petitioner carried the revised order on appeal before the first appellate authority and
obtained an order of setting aside the assessment on those transactions. However, the Joint Commissioner by invoking his suo motu revisional
power and after hearing the petitioner''s objections, modified the order of revisional assessment by fastening the liability on the petitioner in respect
of the purchase turnover from the three selling dealers at 50:50 basis. As against the order of the Joint Commissioner, the petitioner filed an appeal
before the Special Tribunal u/s 38 of the Act. The Special Tribunal by its order, which is impugned in the writ petition, confirmed the order. The
correctness of the said order is now put in issue in the present writ petition.
3. The learned counsel Mr. Sundareswaran appearing for the petitioner has contended that the purchases made by the petitioner were covered
under valid bills issued by the selling dealers, who were registered under the Act and hence the question of shifting levy of tax u/s 7-A of the Act is
unjustified. He further contended that by producing the purchase bills, the petitioner had proved that there were earlier sales by the selling dealers
in favour of the petitioner. Hence, it is for the revenue to collect the tax from the dealers, who issued the bills. It is also submitted by the learned
counsel that the entire amount has been paid by way of cheque and in such circumstances, it is for the Department to collect the tax from the selling
dealers and mulcting the liability on the petitioner is not correct.
4. On the other hand, the learned Government Pleader submitted that the very point has been considered by the authorities as well as the Special
Tribunal in the revision and appeal under the provisions of the Tamil Nadu General Sales Tax Act. The fact finding authorities ultimately found that
the selling dealers were not in existence and the petitioner has produced only bills from non-existing dealers. It was also found on fact that the
selling dealers neither carried on business nor handled the goods and the addresses given were bogus. When the petitioner claims that it is entitled
to the benefit of the second sale and if the initial burden is discharged by the Department, it is for the petitioner, who claims the benefit to prove that
the dealers are genuine dealers and the purchase turnover for which exemption is claimed have already suffered tax. In the absence of any such
materials, it is futile to contend that the order impugned is not correct.
5. We heard the arguments of the learned counsel on either side and perused the materials on record.
6. Mr. Sundareswaran, learned counsel appearing for the petitioner has vehemently contended that when the purchasing dealers are registered
dealers, and the petitioner has produced the relevant purchase bills before the authorities, it is for the revenue to collect the amount from the selling
dealers and it is not for the petitioner to prove the selling dealers were genuine dealers or the dealers were in existence, particularly when the selling
dealers issued with registration certificates from the Department. He concentrated much only on this issue and for that matter, he relied on the
judgment of this Court in LAKSHMI STEEL TRADERS VS. BOARD OF REVENUE (COMMERCIAL TAXES) reported in (1991) 82 STC
409, wherein this Court has held thus:
If a dealer establishes that a particular turnover represents second sales of goods taxable at the point of first sale and the first sale was by a dealer
liable to pay tax, then the revenue cannot deny the exemption on the second sales merely on the ground that the registration certificate of the first
dealer was cancelled during the assessment year in question or immediately before the purchase by the dealer, namely the second seller. However,
the dealer (second seller) must establish that the first sale was a taxable sale; whether the tax had been paid by the first seller or not is not the
concern of the dealer (second seller). The Revenue cannot take advantage of the fact of cancellation of the registration certificate of the first seller
either on his application or otherwise, without further investing as to whether the bills issued by such seller were real or bogus bills. In the event of
the Revenue establishing that the bills produced by the dealer (second seller) are bogus and were not really issued by the first seller, then the dealer
cannot claim exemption on the alleged second sales.
7. We fail to conceive as to how this judgment is applicable to the facts of the present case. In fact, in our opinion, the said judgment instead of
advancing the case of the petitioner, it demolishes the petitioner''s case. As ruled by the Judgment, in the present case, the Assessing Officer, the
Joint Commissioner as well as the Special Tribunal recorded a very clear finding that the three selling dealers were non-existing and never carried
on any business. The addresses, both business address and residential address given in the Registration Certificates are bogus. The summons sent
to the addresses were returned with postal endorsement ""No such addressee"". On physical verification also, it was found that the three dealers
never carried on any business. The cheques issued by the petitioner were realized by one Raja, who is nothing to do with the three dealers. By
recording the above findings, the revenue established that the bills produced by the petitioner are bogus. The decision of this Court in the case of
GOVINDAN & CO. VS. STATE OF TAMIL NADU (1975) 35 STC 50, which has been subsequently confirmed by the Supreme Court in
STATE OF TAMIL NADU VS. RAMAN & CO. reported in (1994) 93 STC 1994 is also to the same effect. In the absence of any materials
placed by the petitioner to prove the contrary either before the authorities or even before this Court, there is no scope for interference by this
Court.
8. The learned counsel Mr. Sundareswaran has submitted that in the order of the Special Tribunal, there is a finding to the effect that the Raja
Agency is also another bogus dealer and the said finding is unwarranted in the facts and circumstances of the case as it would adversely affect the
petitioner in other cases pending before the authorities. The facts in issue in the present case related only to the three agencies viz., Industrial
Chemicals, Selva Agency and Many Agency from whom the said purchases were said to have been made by the petitioner. In the circumstances
of the case, we are of the view that the said finding is unnecessary. Hence, the finding is vacated.
For the reasons stated above, we are of the view that there is absolutely no error apparent on the face of the record in the order of the Special
Tribunal so as to interfere with the same in the present writ petition. Hence, the writ petition is dismissed. However, there is no order as to costs.