TMI Blog2014 (2) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... if no tax is payable under Sections 3 or 4 and consumes or uses such goods in or for the manufacture of other goods for sale or otherwise, Section 7A would stand attracted - Considering the fact that Section 7A of the Tamil Nadu General Sales Tax Act, 1959 is a charging section aimed at plugging the loop hole in cases where goods had not suffered tax and by reason of circumstances stated in the Section are not available for further dealing under the provisions of the Act, the contention of the assessee that the failure on the part of the seller to get himself registered and pay tax would be a circumstance, which has to be considered in favour of the assessee for the purposes to levy of tax under Section 7A of the Tamil Nadu General Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Sales Tax Appellate Tribunal relating to the assessment year 1992-93 regarding the assessment made under Section 7A of the Tamil Nadu General Sales Tax Act, 1959 raising the following questions of law: "1. Whether the petitioners are liable to purchase tax under Section 7A on the purchases effected from unregistered dealers who were liable to pay tax under Section 3 by virtue of such sellers having turnover in excess of the exemption limit? 2. Is the order of the Sales Tax Appellate Tribunal restoring the levy of penalty under Section 16(2) legal without there being either finding of wilfulness or non-disclosure of turnover especially when no ground had been raised by the Revenue to seek the restoration of the penalty?" 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t themselves registered under the Tamil Nadu General Sales Tax Act, 1959 by reason of the turnover being below the taxable limit. The First Appellate Authority pointed out that in the assessee's case the sellers ought to have got registered themselves and paid tax thereon. A mere failure on the part of the sellers in registering themselves would not be justified in invoking Section 7A of the Tamil Nadu General Sales Tax Act, 1959. Thus, the First Appellate Authority allowed the assessee's appeal, thereby setting aside the order of assessment as well as the penalty levied. 6. Aggrieved by this, the Revenue went of further appeal before the Sales Tax Appellate Tribunal contending that in the light of the decision of the Supreme Court in [St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court reported in (1975) 36 STC 191 (SC) (cited supra). As is evident from the reading of the Section 7A of the Tamil Nadu General Sales Tax Act,1959 every dealer, who in the course of his business purchases from a registered dealer or from any other person, any goods, (the sale or purchase of which is liable to tax under this Act) and in the circumstances, if no tax is payable under Sections 3 or 4 and consumes or uses such goods in or for the manufacture of other goods for sale or otherwise, Section 7A would stand attracted. 10. Considering the fact that Section 7A of the Tamil Nadu General Sales Tax Act, 1959 is a charging section aimed at plugging the loop hole in cases where goods had not suffered tax and by reason of circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been disclosed in the return, penalty was levied in this case. Considering the requirement as to the satisfaction to be recorded on the wilful suppression as stated under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959, we find there exists no case for levying penalty. 14. In the circumstances, we do not find there exists any ground to interfere with the order of assessment made under Section 7A of the Tamil Nadu General Sales Tax Act, 1959 and consequently, the order of the Tribunal is confirmed. However, as regards the levy of penalty under Section 16(2) of the Tamil Nadu General Sales Tax Act, 1959, we set aside the order passed by the Sales Tax Appellate Tribunal. 15. In view of the above, the order dated 30.03.1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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