9911796707
TMI Blog2009 (12) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... s passed by the first respondent. On October 26, 1999, the place of business of the petitioner was inspected and the documents available were verified and it revealed that the petitioner received premium from the transfer of the quota entitlement certificate issued to them by the Apparel Export Promotion Council (AEPC) for Rs. 9,28,925 during the year 1998-99, which according to the Department is liable to tax at 11 per cent. During the course of the inspection a sworn statement of the proprietrix was recorded. On October 29, 1999, the petitioner appears to have paid the entire tax demanded by two cheques for Rs. 1,02,181.75 for the period 1998-99 and Rs. 1,68,898.83 for the period 1999-2000 (up to September 1999). A representation was also made on the said date, wherein the petitioner stated that they have made payments fully for the period from April 1998 to March 1999 and from April 1999 to September 1999 and undertook to pay the tax in the succeeding months to the Commercial Tax Officer, Kilpauk Assessment Circle, if there is quota sales. Thereafter a notice was issued to the petitioner alleging that they have failed to disclose either in their returns regarding the AEPC quota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of inspection would itself establish that there was no intention to evade payment and once the tax has been paid, it cannot be stated there is wilful non-disclosure of any assessable turnover. The learned counsel relied upon another order of the Tribunal in T.A. No. 309 of 2001, which according to the petitioner was under similar circumstances, and therefore the Tribunal ought to have allowed their appeal. The learned counsel would further contend that under serial No. 46A in Part D of the First Schedule to the Act, tax was leviable at 11 per cent on sale of goods described as REP licence/exim scrip. This entry was in force from March 5, 1997 to August 7, 1998, and was subsequently modified as patents, trade marks, import licences including exim scrips, export permit or licence or quota and other goods of incorporeal or intangible character and this entry was inserted by gazette dated May 19, 1997 with retrospective effect from March 5, 1997. The learned counsel would submit that the honourable Supreme Court in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes [1996] 102 STC 106 held that REP licence and exim scrips are "goods" as defined under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue relating to the scope of entry 46A in the First Schedule to the Act was not raised by the petitioner before the Tribunal nor before the statutory authorities and it has been raised for the first time before this court. In any event, the learned Special Government Pleader would submit the amendment to entry 46A from September 8, 1999, by incorporating the words patents, trade marks, import licences including exim scrips, export permit or licence or quota, etc., was only clarificatory in nature and it is not the case of the petitioner/dealer that the REP licence was in any manner different from that of the "quota". It is further submitted that on account of the trade policy of the Government of India, new incentives are offered to importers and exporters and the terminology alone differs and it does not change the character of the benefit granted to either the importer or the exporter. Further, the petitioner being an export house was very well aware of the said position and the suppression of the quota sales is wilful. It is further contended by the learned counsel that the law on the subject, namely, as to whether REP licences and exim scrip are goods was settled by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity of showing cause against such imposition." Section 16 provided for reopening of the completed assessment by the same authority who made it so as to include any turnover, which had escaped taxation and also to rectify cases were lower rate of tax had been levied. Sub-section (2) of section 16 provides for levy of penalty for wilful non-disclosure of assessable turnover. This power to levy penalty being discretionary, it is incumbent upon the authority to record reasons before proceeding to levy penalty. The language employed in sub-section (2) of section 16 is that the assessing authority should be satisfied that the escape from the assessment is due to "wilful non-disclosure" of assessable turnover. The honourable Division Bench of this court in State of Tamil Nadu v. Estate of V. U. Panneer Nadar by P. Parameswari (wife) [1979] 44 STC 300 held that before it could be stated that a turnover, which had escaped assessment was wilfully not disclosed by an assessee, the Department had to establish that the assessee had the necessary mens rea and the mere use of the expression suppression in the order is not enough. Therefore, mens rea is necessary to assess penalty under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of "goods" under section 2(j) of the Act. In fact this position came to be examined in respect of REP licences and exim scrips, which were held to be goods by the honourable Division Bench of this court in P. S. Apparels v. Deputy Commercial Tax Officer, T. Nagar East Assessment Circle, Madras [1994] 94 STC 139. The honourable Division Bench held (page 147): "7. . . . In our view, the rights to import conferred under the licences in question are very valuable rights and as slips of paper or memoranda evidencing the entitlement and right to import goods of the category and of value from outside the country into this country, in a sense by itself could be regarded as an article of merchandise and, therefore, would constitute 'goods' capable of themselves being bought or sold in the market. The submission that the licences under consideration are actionable claims, therefore, is not tenable. 8.. . . . The licences under consideration can hardly be claimed to satisfy this criteria also. Therefore, we are of view that the licences under consideration which have been held by us to be 'goods' do not fall within the excluded category or class of goods so as to take them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel appearing for the petitioner. In fact in the statement given by the proprietrix of the petitioner on October 26, 1999, what was stated is that for the quota sales tax due the proprietrix shall consult her auditor and pay the tax due if any within a period of a week. Therefore, the law had been settled by the honourable Division Bench of this court in the case of P. S. Apparels [1994] 94 STC 139, on this aspect as regards taxability of the quota sale as early as on April 4, 1994, the question of entertaining any doubt does not arise. In the typed set of papers a photo copy of what is stated to be the quota sales account ledger bearing page No. 125 has been filed. Similarly photo copy sales accounts has been filed, bearing page No. 127. The learned counsel appearing for the petitioner would submit the sales account was produced at the time of original assessment and the assessing authority on perusal of the same affixed his seal and signature on July 29, 1999, which is official proof that the assessment was based on records produced. It is to be noted that there is no seal or signature in the quota sales accounts sheet and it is a finding of fact that what was produced was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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