TMI Blog2004 (9) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, viz., Deputy Commissioner (CT), Appeal, Coimbatore, which is preferred by the assessee against the levy of penalty made by the Assistant Commissioner (CT), Central Assessment Circle, Coimbatore, the third respondent herein and restored the order of penalty made by the assessing authority under section 22(2) of the Act. 1.2. Even though the said order dated November 17, 1997 of the second respondent was challenged by the petitioner/assessee before the Tribunal in T.C. Nos. 147 to 149 of 1999, the Tribunal by a common order dated February 7, 2002 confirmed the orders of the second respondent/Joint Commissioner dated November 17, 1997, which necessitated the petitioner to prefer these writ petitions for issuance of a writ of certiorari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State, and that the collection of "service charges" is permissible as the same is intended only to recoup sales tax suffered in the first point and consequently section 22 of the Act is not attracted and the levy of penalty therefore is not warranted, the appellate authority, viz., the second respondent reversed the same, which necessitated the revisional authority to take a suo motu revision under section 34 of the Act and by an order dated November 17, 1997 to reject the case of the assessee/petitioner, by restoring the levy of penalty holding that (i) the recoupment of sales tax as contended in the name of "service charges" is totally foreign to the provisions of the Act and consequently, (ii) the levy of penalty is attracted under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore such collection of amount is forbidden under section 22(1) of the Act and therefore penalty imposed under section 22(2) of the Act is justified in law. 5.. We have given careful consideration to the submissions made by either side. 6.1. It is a settled law that the penalty imposed under section 22(2) of the Act was not for non-payment of collections into the Government treasury, but for collections by way of tax from transactions not liable to tax. Therefore, if the collection of tax was on a transaction which is liable to tax under the Act, such collection could not be said to be in contravention of section 22(1) of the Act or rule 24(16)(ii) of the Rules, vide Metal Sales Corporation case [1983] 52 STC 392 (Mad.). In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id amount collected in the name of "handling charges" had been collected only by way of tax or purporting to be by way of tax attracting section 22(1) of the Act and sustained the penalty imposed under section 22(2) of the Act. 6.3. Again in Swastik Household and Industrial Products case [1997] 106 STC 372 (Mad.), the contention of the assessee that the sum collected from the customers in the name of "incidental charges" to recoup the tax paid on purchase will not attract section 22(1) of the Act for the purpose of levying penalty under section 22(2) of the Act, was rejected by this Court, as such collection of amounts from purchasers had been made only by way of tax or purporting to be by way of tax. 6.4. In Steel Sales Organisation ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of "service charges", "handling charges", "incidental charges" or "recoupment of sales tax ", is forbidden under section 22(1) of the Act, attracting levy of penalty under section 22(2) of the Act. 6.7. Therefore, finding that it is difficult to follow the ratio laid down in Metal Sales Corporation v. Joint Commercial Tax Officer, Harbour III Assessment Circle [1983] 52 STC 392 (Mad.), where the Revenue has not clearly stated and established the excess amount collected by the dealers, and following the decision in Swastik Household and Industrial Products case [1997] 106 STC 372 (Mad.), Speed-Away Limited case [1997] 106 STC 367 (Mad.) and Steel Sales Organisation case [1993] 90 STC 243 (Mad.), these writ petitions are dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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