TMI Blog2008 (12) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... unloading charges and therefore, rightly held that the assessment was one under section 12(2) of the TNGST Act. The question is answered in favour of the assessee. The tax case (revision) is, accordingly, allowed. - 1328 of 2006 - - - Dated:- 4-12-2008 - PRABHA SRIDEVAN AND SASIDHARAN K.K. , JJ. ORDER:- The order of the court was made by Mrs. PRABHA SRIDEVAN J. The question raised in this revision is, whether the penalty levied under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as, the Act ) is sustainable, when the assessment order is one made to the best of judgment under section 12(2) of the Act. The learned counsel for the petitioner would submit that the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) of the Act and therefore, penalty was rightly restored and he would further submit that since the assessing officer found that the return was incorrect and incomplete, section 12(4) of the Act is consequently attracted. Section 12(2) and 12(4) of the Tamil Nadu General Sales Tax Act read as follows: Section 12. (2) If no return is submitted by the dealer under subsection (1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incomplete or incorrect, the assessing authority shall, after making such enquiry as it may consider necessary, assess the dealer to the best of its judgment (subject to such conditions as may be prescribed). . . . (4) Notwithstanding anything cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... figures found in the accounts and therefore, the assessment was one under section 12(4) of the Act. The following paragraph, in the said judgment, is relevant to note the distinction between section 12(2) and 12(4) of the Act (at page 231 of 53 STC): . . . A conjoint reading of sub-sections (2), (3) and (4) of section 12 would indicate that section 12(3) will come into operation when no return is filed within the prescribed period, or when the return filed is found to be incorrect or incomplete. But sub-section (4) of section 12 will come into play only when the return filed by the assessee, which is found to be incorrect or incomplete, is inconsistent with the entries found in the accounts which are accepted as correct. Thus sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two events: (i) if no return has been submitted by the dealer under sub-section (1) within the prescribed period, and (ii) if the return submitted by him appears to be incomplete or incorrect. Sub-section (3) empowers the assessing authority to levy the penalty only when it makes an assessment under sub-section (2). In other words, when the assessing authority has made the assessment to the best of its judgment, it can levy a penalty. It is well-known that the best judgment assessment has to be on an estimate which the assessing authority has to make not capriciously but on settled and recognised principles of justice. An element of guess-work is bound to be present in best judgment assessment but it must have a reasonable nexus to the avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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