TMI Blog1991 (7) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called "the Act") in the facts and circumstances of the case? To answer the question, a brief reference to certain admitted and salient facts is necessary. 3.. The Tribunal found, as a fact: (1) that the assessees are engaged in the business of decorticating groundnut; (2) that the assessees are millers owning decorticating mills carrying on business in Alangudi; (3) that the purchasers of groundnut kernel from the agriculturists were oil mill owners; (4) that the assessees got themselves registered as dealers under directions of the Commercial Tax Officers, even though they were only decorticating millers; (5) that it was at the instance of the commercial tax authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (11) that the purchasing oil millers were the first purchasers and were liable to pay the sales tax. 4.. None of these facts was controverted by the Revenue. On these admitted facts, the Tribunal came to the conclusion that the levy of penalty by the Appellate Assistant Commissioner and the assessing authority under section 22(2) of the Act, in the facts and circumstances of the case, was not justified and deleted the same. The Revenue is in revision against this order. Before proceeding further, it would be useful to notice the provisions of section 22(1) of the Act, which reads thus: "22(1). No person who is not a registered dealer shall collect any amount by way of tax or purporting to be by way of tax under this Act; and no regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions, it becomes apparent that the penalty may be levied by the authorities under section 22(2) of the Act, after giving the affected party a reasonable opportunity of being heard by an order in writing, where there has been a contravention of the provisions of sub-section (1), implying thereby that any amount has been collected, by way of tax or purporting to be by way of tax under the Act by a person including a registered dealer, except in accordance with the provisions of the Tamil Nadu General Sales Tax Act and the Rules framed thereunder. 6.. In the facts as noticed above, can it be said that the assessees had "collected" any amount by way of tax or purporting to be by way of tax under the Tamil Nadu General Sales Tax Act? The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or was ready to return it if eventually it was not taxable, it was not collected. 'Collected', in an Australian Customs Tariff Act, was held by Griffith, C.J., not 'to include money deposited under an agreement that if it was not legally payable it will be returned'. (Words Phrases, page 274). We, therefore, semanticise 'collected' not to cover amounts gathered tentatively to be given back if found non-exigible from the dealer." It would be relevant to notice here that the above opinion was rendered by the Apex Court on terms of section 37(1) of the Bombay Act, wherein the expression used was "any sum collected by the person by way of tax ........... shall be forfeited...." Thus, even where the forfeiture was preceded by the use of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the groundnut, so as to facilitate the collection of tax by the Revenue and the tax so collected was not retained by the assessees but remitted to the Government treasury. In view of the law laid down by the Apex Court, as noticed above, and on the admitted, established and uncontroverted facts, it cannot, therefore, be said that the assessees had "collected" any amount by way of tax or purporting to be by way of tax, so as to be held liable for contravening section 22(1) of the Act. The assessees had filed affidavits and statements before the department to state that the tax remitted by them was on the account of the purchasing merchants, and that they had no claim over it, nor would they claim any refund of that amount. It is not, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f each case and determine whether or not penalty should be levied and if so, the extent of that penalty. The section fixes the maximum limit of penalty as one and a half times the amount. 9.. In State of Tamil Nadu v. Selvakumar Timber Traders [1984] 57 STC 69 (Mad.), the assessing authority had levied a penalty for violation of section 22(1) of the Act. The Appellate Assistant Commissioner, in appeal, had reduced the quantum of the penalty. The Tribunal considered the second appeal of the assessees as well as the department's enhancement petition asking for the restoration of the penalty as originally levied by the assessing authority and held that there was no case for restoration of penalty, as levied by the assessing authority and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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