Amritlal Kachira Savla v Commissioner of Domestic Taxes

Section 17(1) permits deduction of input tax only where the supply was actually acquired to make taxable supplies. The High Court held, and this Court agreed, that the purchase must be real and not notional or artificial. Both the Tribunal and the High Court found that mere possession of the listed documents was insufficient, and the Court of Appeal endorsed that concurrent finding, holding that the demand for supplier details, ledgers, and proof of receipt of goods was relevant and within the appellant's reach.

Section 30 of the Tax Appeals Tribunal Act and section 56(1) of the Tax Procedures Act place the burden of proving a tax decision incorrect on the taxpayer. The respondent alleged a missing trader fraud in which paid funds allegedly returned to the appellant. Because this was a serious allegation, the appellant was required to dispel it; his demand for the investigation report was premature since his own burden remained undischarged.

The respondent sought supplier locations, contact persons, active contact details, detailed general ledgers for 2014-2017, cheque counterfoils, bank statements, and evidence of goods receipts and stock movement. The Court viewed this spectrum of information as relevant and reasonably within the taxpayer's reach; at the very least, any difficulty in availing it ought to have been explained. The taxpayer offered no such explanation, claiming only unreasonableness.

Section 56(2) of the Tax Procedures Act confines second appeals to questions of law. Relying on prior decisions of this Court, the panel accepted that an erroneous conclusion based on primary factual evidence is a point of law, but ultimately found that the appellant had simply failed to discharge his evidentiary burden, a concurrent factual finding of the Tribunal and High Court it declined to disturb.