2009 (4) TMI 888 - HC - VAT and Sales Tax

Summary

Issues:
Levy of tax and penalty on premium received for transfer of REP licences.

Analysis:
The revision filed by the assessee challenges the order of the Tamil Nadu Sales Tax Appellate Tribunal regarding the levy of tax and penalty on the premium received for the transfer of REP licences. The court refers to a previous judgment in the case of P.S. Apparels v. Deputy Commercial Tax Officer, where it was established that REP licences/exim scrips are considered "goods" for taxation purposes. The Division Bench clarified that penalties could only be levied from the assessment years 1992-93 onwards, depending on individual cases and circumstances. This decision was upheld by the Supreme Court in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes.

In the present case, the Tribunal found that the assessment order was passed after the decision in P.S. Apparels case, indicating that the assessee should have paid the relevant tax before the final assessment. However, the assessee failed to do so despite having ample opportunity. The penalty provision under section 12(3)(b) of the Act during the relevant period did not provide the assessing officer with discretion for willful non-disclosure, unlike the previous provision. The amended penalty provision removed the element of willful non-disclosure and the assessing officer's discretion, instituting a slab rate of penalty effective from July 1, 2002.

The court emphasized that if there is a discrepancy between the tax paid and assessed, penalty under section 12(3)(b) must be imposed. The taxability of income from the transfer of REP licences was reaffirmed in the case of Yasha Overseas v. Commissioner of Sales Tax. Additionally, the scope of statutory penal provisions was clarified in Union of India v. Dharamendra Textiles Processors by a three-judge apex court judgment.

Ultimately, the court found no valid reason or material to support a different view on the taxability of turnover or the non-payment of tax by the assessee before assessment. Consequently, the court dismissed the tax case revision, upholding the levy of tax and penalty on the premium received for the transfer of REP licences.