Form 38 & Bank Payments Not Enough: High Court Busts Bogus Wheat Purchases, Exposes Fake Transport via Tractors & Bikes:

High Court dismisses revision for failure to prove actual movement of wheat from Delhi; burden to prove interstate purchases lies with the dealer under Section 16.

Burden under Section 16 of the UP VAT Act to prove physical movement of goods rests on the dealer; mere production of invoices

Meetu Kumari

Oct 26, 2025

Last update on Oct 26, 2025

Form 38 & Bank Payments Not Enough: High Court Busts Bogus Wheat Purchases, Exposes Fake Transport via Tractors & Bikes The revision is a result of proceedings under the UP VAT Act regarding the purchase of wheat utilised in the production of atta, maida, suji, and choker. The revisionist revealed purchases of wheat from Delhi via Form 38 amounting to Rs. 10,59,10,067 and made payments through banking channels. A survey conducted on 24/08/2016 recorded missing or incomplete stock and manufacturing registers, discrepancies on physical verification of finished goods, and vehicle numbers recorded in transport documents related to vehicles such as tractors, motorcycles, and bulldozers. On those findings, the assessing authority treated purchases of wheat from Delhi as suppressed purchases valuing Rs. 4,60,24,006 and imposed tax liability of Rs. 18,40,960 by assessment order dated 20/06/2018. On first appeal, the turnover treated as suppressed was reduced to Rs. 2,30,00,000 and tax liability to Rs. 9,20,000 by order dated 05/12/2018. The Commercial Tax Tribunal in the second appeal fixed the suppressed purchase at Rs. 1,50,00,000 and imposed tax liability of Rs. 6,00,000 by order dated 19/07/2019. The revisionist challenged the Tribunal’s order before the High Court. Issue Raised: Whether the dealer discharged the burden under Section 16 of the UP VAT Act to prove actual physical movement and genuineness of alleged interstate purchases when vehicle details and corroborative material were not satisfactorily established. HC’s Decision: The Court held that the burden to prove facts specially within the knowledge of the assessee rests upon the dealer under Section 16 of the UP VAT Act. The Court observed that mere production of invoices, banking payments or Form 38 is not sufficient to discharge that burden. Verification of vehicle registration numbers revealed some numbers to be of two-wheelers, passenger vehicles, small three-wheelers or not traceable; thereafter, the dealer “miserably failed” to establish actual physical movement of goods from Delhi. The Court found no reason to depart from earlier decisions on the point, held that the Tribunal’s approach was justified, and dismissed the revision. The substantial questions of law were answered in favour of the Revenue and against the revisionist. To Read Full Judgment, Download PDF Given Below

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Meetu Kumari

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Meetu Kumari is an Experienced Advocate and Content Writer with 4+ years of demonstrated history of working in the law practice industry. Skilled in Developing Content, Researching, and Drafting. Strong professional with a Bachelor of Science (B.Sc.) focused on Law from Gujarat National Law University.