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2021 (4) TMI 412 - HC - VAT and Sales TaxValidity of assessment order - validity of estimation done by the Assessing Officer based upon records, which were recovered during the inspection - HELD THAT:- The Tribunal found that the petitioner had paid wages during the relevant year to the tune of ₹ 4,12,515/- as per book marked “B” and based upon the payment of wages, the Assessing Officer estimated the value of the electrical goods manufactured and sold outside the accounts at ₹ 22,27,551/- and the purchase of raw materials outside the accounts at ₹ 16,50,060/- under Section 7A of the TNGST Act. The Tribunal noted that there was no proof by way of delivery note for the supply of raw materials for manufacture of finished goods for labour charges. Further, it noted that there was no proof for the supply of finished goods to the customers with the labour bills raised by the petitioner in the name of the customers whereas, there was receipt of raw materials by the petitioner in the name of some other party. The extract of the bank account showed that a sum of ₹ 9,07,529/- was credited for the year 1997- 98 and though the petitioner contended that the amount related to labour charges, no proof was produced by the petitioner and in the absence of evidence to prove that the receipt of money was for labour charges, the Tribunal concluded that the Assessing Authority was justified in drawing an inference of sales suppression. Levy of penalty - Section 12(3)(b) of the TNGST Act - HELD THAT:- The turnover has been estimated based upon the bank statement, the entries in the books, which were recovered during inspection and there is no allegation of concealment. Further, we find that there is no specific allegation made against the petitioner as to on what basis, the Assessing Officer was of the view that penalty has to be imposed on that petitioner, that too, at 150% - in the absence of proper proposal, the levy of penalty cannot be sustained. The writ petition is partly allowed.
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