M/S STAR PAPER MILLS LIMITED versus M/S BEHARILAL MADANLAL JAIPURIA LTD. & ORS.

Citation: [2021] 9 S.C.R. 1074 · Decided: 16-12-2021 · Supreme Court of India · Bench: HEMANT GUPTA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 9 S.C.R.
   [2021] 9 S.C.R. 1074
1074
M/S STAR PAPER MILLS LIMITED
v.
M/S BEHARILAL MADANLAL JAIPURIA LTD. & ORS.
(Civil Appeal No. 4102 of 2013)
DECEMBER 16, 2021
[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
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,
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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
M/S STAR PAPER MILLS LIMITED v. M/S BEHARILAL
MADANLAL JAIPURIA LTD. & ORS.
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[2021] 9 S.C.R.
sales made by a dealer to a dealer that the sales tax is not payable
as the incidence of payment of tax would

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