Case: State Of W.B.  Vs. Md. Khalil

Adverting to the facts giving rise to CA No. 12060 of 1996, the Entry Tax Authority (for short "the Authority") carried out a raid on the cold storage of M/s. Pratap Company at 15/16, Botanical Garden Lane, Howrah (for short "the cold storage") and seized its record. On examination of the record, it was noticed that 158 persons deposited dry fruits in the cold storage. The verification of the depositors showed that only 24 out of 158 were in existence. The assessing officer issued notice under Section 14(3) of the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972 (hereinafter referred to as "the Entry Tax Act"). The respondent challenged the validity of that notice in a writ petition in the High Court at Calcutta. The High Court declined to grant stay of further proceedings pursuant to the impugned notice and by an interim order directed the respondent to pay the tax as assessed by the Authority and observed that payment of penalty, if imposed, would depend upon the final determination of the writ petition. The Authority assessed entry tax on the cold storage and its partners as well as on the depositors, including the respondent. After the constitution of the West Bengal Taxation Tribunal under the West Bengal Taxation Tribunal Act, 1987, the application of the respondent along with other similar applications was transferred to the Tribunal. Before the Tribunal, the respondent and others questioned the imposition of tax and penalty under the Entry Tax ActThe case of the respondent before the Tribunal was that he purchased the goods from the local market and deposited the same in the cold storage. The goods suffered the entry tax in the name of Keshordeo Sonthalia and others. He denied that he is a "dealer" within the meaning of Section 2(c) of the Entry Tax Act. The appellant denied having levied tax on the goods in respect of which tax was already imposed. The name of the respondent, it is stated, was found in the registers of the cold storage and that he having purchased the goods from outside West Bengal, caused their entry into Calcutta and stored them in the cold storage. The goods (dry fruits) in such huge quantity could not have been purchased locally and the respondent failed to furnish the particulars as to from whom he purchased the goods. The Tribunal took the view that the burden of proving that the goods were brought into the Calcutta Metropolitan Area from outside and it was the respondent who so brought those goods lies on the Authority and that the respondent cannot be called upon to prove that he did not bring the goods from outside into the Calcutta Metropolitan Area. There is no provision in the Entry Tax Act placing the burden of proof on the possessor of specified goods to show that he has not brought the goods from outside. Observing that the conduct of the respondent might be highly suspicious, the Tribunal held that no material was placed on record by the Authority to establish that the goods in question were brought from outside the Calcutta Metropolitan Area and it was actually the respondent who brought the goods within the Calcutta Metropolitan Area. In view of this finding, the Tribunal allowed the application of the respondent, set aside the demand of entry tax as well as the penalty and directed refund of the tax to the respondent within 12 weeks from the date of the judgment dated 11-1-1996.

Court's reasoning:
We are afraid, we cannot accede to this contention. A presumption is a rule of law which requires the court to draw a given conclusion on proof or existence of certain facts and leaves it to the party disputing the conclusion to rebut the same. Presumptions may be of fact or of law. A presumption is an inference sanctioned by law which does not logically or necessarily follow from the proved facts. For raising a presumption, as submitted by Mr. Chakravarty, there must be a specific provision in the Entry Tax Act. No provision in the said Act is brought to our notice which may enable the authority to raise the presumption that a possessor of the specified goods, who fails to produce before the authority his accounts, register or document on being required to do so, has imported the goods into the Calcutta Metropolitan Area without payment of tax. On the facts and circumstances of the case, it is impossible for a court to infer that the respondent has imported the goods into the Calcutta Metropolitan Area without payment of taxIn the light of the above discussion, we cannot but uphold the impugned judgments of the Tribunal.