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2016 (10) TMI 601 - HC - VAT and Sales TaxLevy of penalty u/s 27[3] of the TNVAT Act, 2006 - evasion of sales tax on purchase of earth - Held that: - the decision in the case of Commissioner of Income-Tax, West Bengal And Another Versus Anwar Ali [1970 (4) TMI 1 - SUPREME Court] relied upon where it was held that the true nature of penalty is understood to provide for a deterrent element against possible recurrence of default on the part of the assessees and hence, any order imposing penalty is the end result of a quasi-criminal proceedings. Section 27[3] enables a penalty to be levied wherever a revision of assessment has taken place, pursuant to detection of a portion of turnover that has escaped taxation - there is no dispute on the factual ground that the payment made is in fact reflected in the books of accounts maintained by the respondent dealer in the ordinary course of business, and thus, there is no wilful suppression of any such expenditure, indulged in by the dealer. At the first round of assessment, in fact it has escaped the attention of the AO. In other words, no serious exception has been taken thereto at the first instance. But, it is subsequent thereto, the scrutiny has been undertaken. There should have been a specific finding recorded by the AO that the turnover that has escaped in the first and initial round of assessment, is the result of wilful non-disclosure or suppression by the dealer. There is no such finding recorded in the Revised Assessment Order dated 30.11.2012. A proper and careful quasi-criminal exercise of imposition of penalty has not been carried out by the AO. The finding of wilful non-disclosure/suppression of turnover is the condition precedent, which alone fetches the imposition of penalty is conspicuous by its absence in the order of reassessment. In the absence of any such finding, imposition of penalty could not be lawfully carried out. Petition dismissed - deletion of penalty justified - decided in favor of respondent-assessee.
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