Burden In Tax Cases

Burden in Tax Cases Explained by HC

Origin of Case : 

Department passed Order under under Section 129 (3) of IGST/CGST Act.

Argument by petitioner was : in the seizure proceeding under Section 129 of the Act, the authority cannot seize the goods on the ground of under valuation.

Department argued that goods were detained and seized not only on the ground of under valuation but also on the ground of non-genuine documents accompanying with the goods.

What Hon'ble Court noted : 

"It is admitted between the parties that the goods in question was accompanying with the tax invoice and cross challan but on the statement of the truck driver that the goods were loaded from Kanpur, the proceedings have been initiated. The accompanying document shows the movement of the goods from West Bengal / Assam to Delhi, whereas in the statement of the truck driver the goods were loaded at Kanpur. The record further shows that the petitioner had neither submitted any reply nor contradicted the statement made by the truck driver." 

"In none of the grounds of appeal, any detail of vehicle or mode of transport has been whispered in order to explain as to how the goods were moved from West Bengal / Assam to Kanpur. Once the findings of fact recorded against the petitioner have not been assailed in the appeal, the proceedings cannot be said to be illegal or arbitrary in any manner."

"Under the taxing statute, in the original proceeding or in the summary proceeding, the primary burden is to be discharged by the assessee by bringing on record the cogent material. The burden of proof is shifting to the department only in the re-assessment proceeding or subsequent proceeding not being the original proceeding."

Writ petition was dismissed.

For details refer M/S Jaya Traders v Additional Commissioner [2025] GCtR 695 (Allahabad)

Post dedicated to Former RMLNLU Graduate Late Shri Shashank Singh, a brilliant legal wizard.