Suit – Recovery suit – Respondent was a wholesale dealer of the appellant-company and was purchasing paper from the appellant – Huge stocks lifted by the respondent – Payments defaulted – Suit for recovery filed by appellant – Decreed by Single Bench – Order set aside by Division Bench – On appeal, held: Respondents alleged that the bills were raised on the basis of fictitious and fraudulent transactions however, failed to discharge the onus of proof – Invoices, debit note and ST-1 Form were issued only after the receipt of goods – Receipt of goods is proved by such documents which were stamped and signed by the respondents – Respondents’ stand that the documents were signed under duress is untenable – Order of Division Bench set aside – Suit decreed – Delhi Sales Tax Act, 1975 – ss.4(2)(a)(v), 14 – Delhi Sales Tax Rules, 1975 – r.7. Delhi Sales Tax Act, 1975 – s.4(2)(a)(v) – Scope of – Discussed – Delhi Sales Tax Rules, 1975 – r.7.
Deeds and Documents – Examination of author of a document – When not required – Discussed – Suit.
Deeds and Documents – Documents maintained in the regular course of business – Proof of – Held: It is not necessary for the witness to be signatory of such documents or that such documents were executed in his presence – Suit.
Allowing the appeal, the Court
HELD: 1.1 The witness of the respondent has admitted his signatures on the ST-1 Form, invoice and debit notes. The respondent company denied the signatures of its representative only on the Delivery Challan. The respondents alleged that the alleged bills have been raised on the basis of fictitious and fraudulent transactions. Since such stand was of the respondents, the onus of proof of such issue was on the respondents. It is the respondents who have alleged the transaction as fraudulent. The onus of proof was on the respondents but the respondents have failed to discharge the same. [Paras 12, 13 and 15] [1082-A-C, G-H]
1.2 The reasoning of the Division Bench that the witness examined by the appellant was not in Delhi when the transactions took place is wholly irrelevant to determine whether the invoices, debit notes and ST-1 Form are proved or not. It is not a case of mere exhibition of documents. Such documents were proved by a witness as such documents were kept by the appellant in their ordinary course of business. All these documents are stamped and counter-signed by the representatives of the respondents. Such documents have come from the records of the appellant. It is not necessary for the witness to be signatory of such documents or such documents were executed in his presence. The documents were maintained in the regular course of business of the appellant. There is no dispute about the maintenance and production of such documents. The account books were not produced by the respondents to discharge the onus on them. Therefore, the adverse inference had to be drawn against the respondents rather than against the appellant who are not relying upon the entries in the account books alone to maintain suit but reliance is on the invoices, debit note as well as ST-1 Form which had been issued only after the receipt of goods. Though the respondents have denied the receipt of goods but the receipt of goods is proved by numerous documents stamped and signed by the respondents. [Paras 14, 16][1082-D-F; 1083-C-E]
2. Section 4(2)(a)(v) of the Delhi Sales Tax Act, 1975 excludes the sale made to the registered dealer from the taxable turnover. Rule 7 of the Delhi Sales Tax Rules, 1975 allows the dealer to claim deduction from his turnover if he files a declaration in ST-1 Form duly filled in and signed by the purchasing dealer or a person authorized by him in writing. The respondents have admitted that no sales tax is payable by a dealer to a dealer. By necessary implication, the respondents are admitting the appellant to be a dealer as also the respondents to be dealer under the Delhi Sales Tax Act, 1975. It is only on account of sales made by a dealer to a dealer that the sales tax is not payable as the incidence of payment of tax would be when the goods are sold to a consumer. The respondents as wholesaler, were getting the benefit of trade discount, which is an agreed term of sale. [Paras 17-19][1083-E; 1084-C-D, F-H]
3. The High Court, in the impugned judgment erred in holding that the appellant had not examined the author of the documents. Such reasoning is absolutely erroneous as in the written statement, the respondents had not denied their signatures on the documents referred to by the appellant but pleaded duress in executing of these large number of documents. The respondent had led no evidence in respect of fraud or duress apart from self-serving statement. The consignment of goods was sent from the month of November 1985 to January 1986. The respondent had signed large number of documents during this period. However, no complaint was made to any person or authority or even to the plaintiff. Such a stand is wholly bereft of any truth and is thus rejected. Large number of documents such as invoices, debit notes and ST-1 Form spread over 3 months is unbelievable to be an exercise of duress. The order of the Division Bench of the High Court dated 28.5.2012 is set aside. The suit is decreed. [Paras 20-22][1084-H; 1085-A-C, E]
Subhra Mukherjee and Another v. Bharat Coking Coal Ltd. and Others (2000) 3 SCC 312: 2000 (3) JT 55; Ishwar Dass Jain v. Sohan Lal (2000) 1 SCC 434 : [1999] 5 Suppl. SCR 24 – held inapplicable.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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