TMI Blog1995 (4) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... he book turnover. On appeal, the Appellate Assistant Commissioner, following a decision of the Supreme Court reported as State of Madras v. S.G. Jayaraj Nadar Sons [1971] 28 STC 700 has held that penalty in this case under section 16(2) of the Act cannot be levied. Aggrieved the department filed an enhancement petition before the Tribunal to restore the penalty levied by the assessing officer in the appeal filed by the assessee against certain other findings made by the Appellate Assistant Commissioner. The Tribunal held that enhancement petition is not entertainable since the Appellate Assistant Commissioner cancelled the penalty levied, in its entirety. It is against that order, the present revision has been filed by the State. 2.. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books, penalty is not eligible under section 16(2) of the Act. It was further submitted that when the Appellate Assistant Commissioner cancelled the penalty in its entirety, enhancement petition under section 16(3) of the Act is not entertainable by the Tribunal. The learned counsel supports this contention by relying upon the decision in State of Tamil Nadu v. Jakthi Veliyeetakam [1977] 40 STC 466 (Mad.). Therefore, both on merits as well as on jurisdiction, it was submitted that penalty under section 16(2) of the Act is not exigible in the case of the assessee. 4.. We have heard the rival contentions of the learned counsel on both sides. It is the admitted fact that penalty under section 16(2) of the Act to an extent of Rs. 6,760 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration is 1977-78. According to the learned counsel appearing for the assessee, this amendment can have no application for the earlier assessment years. The learned Additional Government Pleader submitted that the amendment brought out by Act 78 of 1986 is only a clarificatory in nature and therefore the amendment can be applicable even to the period earlier to the period January 1, 1987. We consider that there is sufficient force in the argument advanced by the learned Additional Government Pleader (Taxes) in this regard. In this connection, our attention was drawn to the decision in Bhavani Mills Limited v. State of Tamil Nadu [1994] 94 STC 120 (Mad.) wherein while considering the expression "enhance" appearing in section 36(3), this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Appellate Assistant Commissioner, under the revisional jurisdiction. Therefore, in such a case, unless the State is permitted to challenge the order passed by the Appellate Assistant Commissioner cancelling the penalty in its entirety, such an order will remain unchallenged. In order to get over this anomaly later on Act No. 78 of 1986 was passed introducing an amendment with effect from January 1, 1987 inserting the expression "restore fully or partially, as the case may be". In view of the aforesaid reasonings, we hold that the enhancement petition filed by the State for restoration of penalty imposed by the assessing officer which was cancelled by the Appellate Assistant Commissioner in its entirety is maintainable. 5.. In so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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