Andhra HC (Pre-Telangana)
Ambati Ramaswamy Chetty And Co. vs The State Of Andhra Pradesh on 4 February, 1976
Equivalent citations: [1977]39STC416(AP)
JUDGMENT S. Obul Reddi, C.J.
1. In these two revisions the dispute is regarding the tax liability on inter-State sale turnover of gingelly seeds, in one case amounting to Rs. 3,77,262.94 and in the other Rs. 4,15,610.51. Though these two cases relate to two different assessees and to two different assessment years, in view of the identical question arising in both the matters, the Appellate Tribunal disposed of the two appeals by a common order.
2. Mr. Dasaratharama Reddi, the learned counsel appearing for the petitioners, strenuously contended that the fact that in the bills or invoices it is mentioned that the sale price is inclusive of sales tax does not by itself establish that the assessees have collected sales tax, thus attracting their liability to pay the sales tax collected.
3. The facts briefly stated are these : The two petitioners are registered dealers at Rajampet in Andhra Pradesh. They sold gingelly seeds in the course of inter-State trade during the assessment years in question. In respect of the inter-State sales, the assessing authority computed the turnover inclusive of tax and granted exemption of tax by applying the formula laid down in Rule 11(2) of the Central Sales Tax (Registration and Turnover) Rules. That is how he determined the net turnover in both the cases. The only question is whether the petitioners collected tax on the inter-State sales and if the answer is in the affirmative, they are liable to pay sales tax. Otherwise, they are entitled to exemption under Section 10 of the Central Sales Tax (Amendment) Act (28 of 1969).
4. Mr. Dasaratharama Reddi, the learned counsel for the petitioners, relying upon three decisions of the Mysore High Court contended that it is not enough even if it is stated in the bills that the price is inclusive of sales tax. It must further be examined by the assessing authority with reference to the account books to see whether the account books disclose entries made separately regarding sales tax collected.
5. In Spencer & Co. Ltd. v. State of Mysore [1970] 26 S.T.C. 283. a Division Bench of the Mysore High Court held that the evidence concerning the transaction must show that the buyer had agreed to pay sales tax in addition to the price and the seller's account books should disclose such amount separately and where there is absence of such evidence, it cannot be said that amounts were collected by the dealer in the character of or as being tax. That decision was subsequently relied upon by the same High Court in two other cases, Bhaidas Cursondas & Co. v. Commercial Tax Officer [1975] 35 S.T.C. 459 and State of Mysore v. Hanjarimal Saremalji [1975] 36 S.T.C. 206.
6. We are unable to agree with the view expressed in those decisions by the learned Judges of the Mysore High Court. When the assessee claims exemption in respect of any tax liability, the onus is upon him to show that he is entitled to the exemption claimed. The initial burden cannot be shifted on to the department. The entries in the invoices show "inclusive of sales tax" and the assessees collected the amounts so mentioned in the invoices. It is therefore meaningless to contend that by mistake the words "inclusive of sales tax" have been written in the invoices. The case of the petitioners is that it is so stated in the bills as the non-resident dealers were in the habit of asking for invoices showing that there has been payment of sales tax in respect of single point goods, so that they may not be made to pay sales tax by the assessing authorities. If the petitioners had issued the bills to non-resident dealers stating that the sale price is inclusive of sales tax to oblige the purchasers, it would have been easy for the petitioners to produce evidence to the effect that it was so written only to oblige the non-resident dealers who wanted to evade payment of tax although the sale price did not include the sales tax. The transactions were made conveniently under oral agreements and they had also not chosen to maintain any separate account for the sales tax collections made by them. Therefore, on the facts of this case, we are unable to agree with the learned counsel for the petitioners that the invoices were so made just to oblige the non-resident dealers who did not want the tax liability to be attracted under the Central Sales Tax Act.
7. In the result, the revisions fail and they are accordingly dismissed with costs. Advocate's fee Rs. 100 in each.