Failure to Prove Physical Goods Movement: Registered Dealer Purchases May be Treated as Unregistered Dealer Purchases

Commissioner, Commercial Tax Vs Ramway Foods Ltd (Allahabad High Court)

Introduction: The Allahabad High Court recently delivered a crucial judgment on tax liability concerning purchases from unregistered dealers. In this case, the burden of proving the tax liability shifted to the dealer due to insufficient proof of the actual physical movement of goods. This article provides a detailed analysis of the case and its implications.

Detailed Analysis:

1. Background: The case in question involves Sales/Trade Tax Revision No. 26 and 27 of 2023 for the Assessment Year 2016-17. The primary issue revolves around the burden of proving tax liability on purchases made by a dealer from unregistered dealers. The Commercial Tax Tribunal had partly allowed the dealer’s appeals, shifting the burden of proof onto the tax department. This decision led to the formulation of specific legal questions, which this judgment addresses.

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