TMI Blog1994 (11) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... mption was allowed originally were based on forged bills obtained from non-existent dealers, which was said to have been revealed on certain enquiries. The Deputy Commercial Tax Officer also levied penalty under section 16(2) of the TNGST Act, 1959, for the alleged wilful non-disclosure of assessment turnover at 1 times the tax sought to be assessed. The assessee contended that they had discharged the onus of proof for exemption under section 10 of the TNGST Act, 1959, by producing purchase bills containing the registration certificate numbers of the respective selling dealers and their declaration of sufferance of tax at the relevant single point. They have also produced the cess free permit issued by the Madurai Marketing Committee at Dindigul for transporting groundnut kernel from Dindigul to Karur to the respective sellers on their application and verification thereof that the registration certificates granted to the sellers by the department have not been shown to have been cancelled at the material time. It was further submitted that even if the registration certificate had been cancelled with retrospective effect that would not make the purchases by the assessees as purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Assistant Commissioner considered that the quantum of the penalty levied is excessive. Accordingly, he fixed the penalty levied under section 16(2) at 50 per cent of the tax. Aggrieved, the assessee filed appeals before the Sales Tax Appellate Tribunal and the department filed enhancement petitions. After having heard learned counsel appearing on both the sides the Tribunal held as under: "We are of the view that there is no concealment or non-disclosure or suppression on the part of the appellants. They have bona fidely claimed for exemption, but the same, has not been accepted by the Revenue. Simply because, the appellant's claim for exemption was negatived by the Revenue, that does not mean that the appellants have suppressed anything. In these circumstances, we are of the view that no penalty can be levied against the appellants. Already, we have taken the view that the appellants are entitled for exemption for their purchases made from the respective sellers. We have also taken the view that the sellers were real sellers and the bills issued by them were genuine. In these circumstances, no penalty is leviable against the appellants. Under these circumstances the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the following decisions of the court reported in [1991] 82 STC 409 (Mad.) (Lakshmi Steel Traders v. Board of Revenue), [1986] 62 STC 171 (Cal) [Emerald Paints Colour Products (P.) Ltd v. Commissioner of Income-tax] and [1994] 93 STC 185 (SC) (State of Tamil Nadu v. Raman Co.). 8.. On the other hand, learned counsel appearing for the assessees, submitted as under: The assessing officer had examined the relevant invoices, vouchers, cess free permits, accounts and other relevant records relevant to the claim of exemption in respect of groundnut purchased by the assessees and on being satisfied about the sufferance of tax at the relevant single point tax on such purchases had rightly allowed the exemption. For revising the assessment the Revenue has to establish by positive evidence and acceptable proof that the exemption was in fact wrongly allowed originally. In the present case, there is no valid material brought on record by the Revenue to withdraw the exemption. Mere change of opinion would not constitute jurisdiction to revise the assessment. The assessees have discharged their burden of proof regarding the claim of exemption under section 10 at the time of original a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition recorded ex parte on May 22, 1985, would hold good. The authorities below brushed aside the legal requirement of the assessees to crossexamine the millers from whom statements were obtained. Therefore, it was submitted that there is no case for levy of penalty under section 16(2) of the TNGST Act. The revised assessments made were stated to be void, illegal and without jurisdiction. 9.. We have heard the rival submissions. 10.. The fact remains that the original assessments were made by the Deputy Commercial Tax Officer, Karur, in the case of each of the assessees accepting the claim of exemption in respect of the purchase of groundnut effected by the assessee. The assessing officer revised the assessment under section 16(1) of the TNGST Act, 1959, on the plea that some of the purchases on which exemption was allowed originally were based on forged bills obtained from non-existent dealers. The assessing officer also levied penalties under section 16(2) of the TNGST Act for the wilful non-disclosure of the assessable turnover at 1 times tax due against all the assessees. Against the assessment of the disputed turnover and penalty, appeals were filed by the assessees befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent dealers. The registration certificates issued in favour of the sellers remained uncancelled. The transactions effected by the respective sellers would attract sales tax on the sellers. Further if the transactions were effected prior to the date of actual cancellation it would attract liability of tax in the respective sellers' hands only. 11.. According to the Revenue the bills issued by the alleged sellers were bogus and they were not in existence. The assessees contended that if the bills issued by the sellers are bogus, it is essential to examine the sellers. Admittedly, the Revenue has not examined the sellers who hold the RC numbers at the relevant time. The Revenue has relied upon certain statements obtained from the mill owners. According to the assessees these statements were obtained by the department from the mill owners behind their back. According to the assessees these mill owners are not connected with the transaction in question. The assessees pointed out that the persons who are said to have been examined are not even shown as the owners of the respective mills. The assessees demanded the assessing officer to produce the persons from whom statements were obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary evidence to show that the sellers are not in existence. According to the Revenue, the bills were bogus and prepared by the assessees themselves. In the bills the registration numbers and the names of the sellers were given; but the department failed to identify the sellers and make them available for cross-examination. The groundnuts which have been purchased had already suffered tax in the hands of the sellers. Therefore, the assessees are not liable to pay tax on the second purchases. The facts on record would go to show that the Revenue had revised the assessment without any legal basis, and materials. The documentary evidence produced by the assessees would go to show that the original assessments made in the case of each of the assessee granting exemption is in order. Accordingly the Tribunal was correct in setting aside the revised assessments made by the assessing officer on the disputed turnover. 14.. The assessing authority also levied penalty under section 16(2) of the TNGST Act, 1959. According to the assessees the claim of exemption was made bona fide and the same was also accepted in the original assessments. The assessments were revised on a mere change of opi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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