9911796707
TMI Blog1994 (10) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs. 41,056.28. It was later found that the above persons were decorticators acting as mediators between agriculturists who brought groundnut to their mills for decortication and the purchasers. Inasmuch as Parameswari & Co., were not dealers the next buy- ers-the appellants were considered as first sellers(?) in the State and were assessed to tax at 3 per cent. The Joint Commissioner of Commercial Taxes II, examined the above case with reference to the available records. It is seen from the records that collection of tax by the decorticators who is not a dealer is contrary to section 22(1) of the Tamil Nadu General Sales Tax Act. Hence the Joint Commissioner held that provisions of section 22(1) are attracted. Parameswari & Co. from wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Parameswari & Co. was not disturbed and the assessment has become final. While so, in the suo motu proceeding initiated by the Joint Commissioner it is not possible to hold that the said Parameswari & Co. is not a registered dealer and, therefore, the tax collected by it is illegal and the tax paid by it would be treated as penalty payable to the State. The Joint Commissioner was not correct in holding that the purchase by Lucky Mills is the first purchase and therefore Parameswari & Co., is liable to pay tax. Penalty under section 22(1) and (2) of the Act was not levied by the authorities below, and the Joint Commissioner who is not the assessing authority cannot levy penalty on Parameswari & Co., who is not a party to the present proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,39,230 respectively. According to the Revenue, Lucky Mills purchased groundnut from Parameswari & Co. Parameswari & Co. is not a registered dealer and, therefore, the tax collected by Parameswari & Co. should be treated as penalty payable by it and since the sale in favour of Lucky Mills happened to be the first sale, the tax is payable by Lucky Mills. On the other hand, the appellant submitted that Parameswari & Co. sold groundnut to Lucky Mills and the tax collected on the same, paid to the Revenue. Therefore the sale between Parameswari & Co. and Lucky Mills is the second sale. The tax on sale of groundnut is single point tax. According to the assessee Parameswari & Co. is not a decorticator or a mediator. They are the registered deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee is not the first sale, then under the provisions of the Act that sale cannot be brought within the net of taxation and it is for the revenue to search the first seller and levy tax on the first sale. It is not for the assessee, who is the subsequent seller, to show that the first sale has been taxed. Once it is found that the assessee's sale is a subsequent sale and there has been a first sale in respect of the same goods earlier in the State, then it is for the authorities to proceed to levy that transaction of first sale, and the onus cannot be thrown on the assessee to show that the first sale has suffered tax. The onus on the subsequent seller is only to point out that there has been a first sale and the onus is not on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34 of the Act, levied penalty under section 22(2) on Parameswari & Co., which is not a party to this proceeding. No separate penalty proceeding was initiated against Parameswari & Co. Assessing authority alone can have the power to levy penalty and not the Joint Commissioner. Without affording opportunity of being heard to Parameswari & Co., penalty cannot be levied by the Joint Commissioner against the said company, by treating it as unregistered dealer. 9.. In the present case, under section 34 of the Act the Joint Commissioner cannot treat the tax paid by the said Parameswari & Co. as the penalty paid by it when the assessment on the said company has become final. For all these reasons, considering the facts arising in this case, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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