TMI Blog2014 (5) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Amending Act 60 of 1997 - Section 14 of Act 60 of 1997 saves all actions in the present case as one falling u/s 14 of Act 60 of 1997. The mere fact that the turnover was drawn in the books of accounts, by itself, would not save the assessee from the operation of the provisions of Section 12(3)(b), which is concerned about the submission of incorrect or incomplete return - Thus going by the Explanation to Section 12(3)(b) of the Act, estimation of turnover and rejection of claim for exemption or concessional rate, which are subject to the furnishing of declaration forms, would not invite penal provisions and that actual suppressions alone would attract penal provision - Since the explanation to the said provision was inserted under Act 60 of 1997, effective only from 1.4.1998, the benefit of the same could not be extended to assessee herein - Thus, accounts maintained by the assessee is of relevance both on the aspect of the nature of transaction stated therein as well as to the turnover given therein for the purpose of understanding Section 12(3) of TNGST Act. The turnover of ₹ 49,06,107/- treated as local sales in the assessment, was considered by the Appellate A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee claimed to have purchased raw hides and skins to the tune of Rs.49,06,107/- from outside the State. Even though the assessee contended that payments were made through the bank, they being inter-state purchases, the said claim was rejected by the Assessing Officer on the ground that the assessee had created records as though the raw hides and skins were purchased from outside the State. In the circumstances, in the absence of any records to substantiate that the said turnover pertained to inter-state purchase, the claim of the assessee was rejected. Thus the sale of raw hides and skins was brought for assessment as last purchase under the provisions of the Tamil Nadu General Sales Tax Act. In the light of the rejection of the return filed, the Assessing Authority levied penalty at 1= times of the tax due at Rs.3,67,701/- under Section 12(3)(b)(v) of the Tamil Nadu General Sales Tax Act. 2. Aggrieved by the same, the assessee went on appeal before the Appellate Assistant Commissioner, who granted partial relief in respect of the turnover of sale of raw skins for exports at Rs.14,78,007/-. A further sum of Rs.21,62,834/- was also granted exemption as export sales out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A respectively. However, with the passing of the Amending Act 60 of 1997, the jurisdiction of the Joint Commissioner to revise the orders are restricted to the orders passed under Sections 4-A, 12, 12-A, 14, 15 and 16(1) or (2) of the Tamil Nadu General Sales Tax Act by the Appropriate Authority and under Sections 32(1) and 33(3) by the Deputy Commissioner (Appeals). Thus when the jurisdiction of the Joint Commissioner is restricted to the orders referred to therein and there is a specific exclusion of the orders passed by the Appellate Assistant Commissioner under Section 31(3) or by the Appellate Deputy Commissioner under Section 31-A, the proceedings taken against the assessee to revise the order of the Appellate Assistant Commissioner is void ab initio. 5. Learned counsel appearing for the assessee made particular reference to Section 14 of the Amending Act 60 of 1997 that the saving clause would not, in any manner, help the Revenue, since the proceedings initiated and pending before the commencement of Section 11 of the Amending Act alone are saved for assumption of jurisdiction under Section 34 of the Tamil Nadu General Sales Tax Act. He further pointed out that Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Taxes (1) The Joint Commissioner of Commercial Taxes may, of his own motion, call for and examine an order passed or proceeding recorded by the appropriate authority under section 4-A, section 12, section 12-A, section 14, section 15 or sub-section (1) or (2) of section 16 or an order passed by the Deputy Commissioner under sub-section (1) of section 32 or sub-section (3) of section 33 and if such order or proceeding recorded is prejudicial to the interests of revenue, may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order thereon as he thinks fit." 11. Section 14 of Act 60 of 1997, which is a saving provision to Section 34, reads as follows: "Section 14. Disposal of pending cases before Joint Commissioner of Commercial Taxes All proceedings initiated under sub-section (1) of section 34 of the principal Act and pending before the Joint Commissioner of Commercial Taxes immediately before the date of commencement of section 11 of this Act shall be heard and disposed of by the Joint Commissioner of Commercial Taxes as if, this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner on 29th January, 1999. The appeal papers were returned on 23rd June, 2003 for compliance of certain defects, which was once again re-presented on 25th June, 2003. In the meantime, the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 was enacted. The assessee filed an application under Section 5 of the said Act to have the disputes settled. However, the same was rejected by the Designated Authority on the ground that the appeal filed before the Tribunal was yet to be posted for admission and only when the case was admitted, it could be treated as an appeal 'pending' as prescribed under Clause (i) of Section 4(1) of the Act. Aggrieved by the same, the assessee filed an Original Petition before the Tamil Nadu Taxation Special Tribunal, which was allowed by the Special Tribunal, holding that the assessee was entitled for a certificate of settlement. As against the same, the Revenue came up on appeal before this Court. While considering the meaning of the phrase 'pending' referring to the definition as given in Black's Law Dictionary, The Concise Oxford Dictionary and P.Ramanatha Aiyar's The Law Lexicon, 1987, this Court held: "if an appeal is filed before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, the mere fact that the Assistant Commissioner had signed the service copy on 21.4.1998 does not mean that the proceedings was initiated only on 21.4.1998. In the circumstances, we have no hesitation in holding that the proceedings was initiated within the time prescribed under Section 34 of the Tamil Nadu General Sales Tax Act and the same is protected by Section 14 of Act 60 of 1997. 17. Thus applying the law declared by this Court in the decision reported in (2007) 10 VST 716 (Mad) (State of Tamil Nadu and another V. K.Damodarasamy Naidu Bros and another) (to which one of us is a party), we hold that the proceedings initiated on 31.3.1998, even though served subsequently, is a "pending proceeding" on the files of the Joint Commissioner. 18. Learned counsel appearing for the assessee took the plea that with the chances of the Joint Commissioner dropping the proceedings on considering the objections, the mere initiation of proceedings, by itself, could not be treated as pending to fall under the saving Section 14 of Act 60 of 1997. He further pointed out that Section 34 begins with a satisfaction to be recorded by the Joint Commissioner to invoke the revisional jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), on the difference between the tax assessed and the tax returned, the Assessing Officer shall direct the dealer to pay by way of penalty at the graded percentage. Section 12(3)(b) gives the percentage at which the penalty has to be levied. 24. Going by the provisions of the Act, when Section 12(3)(b) does not reserve any discretion with the Assessing Officer to consider the levy of penalty, penalty provision stood attracted herein, under the stated circumstance of failure to submit the return or in the case of submission of incorrect or incomplete return. The mere fact that the turnover was drawn in the books of accounts, by itself, would not, in any manner, save the assessee from the operation of the provisions of Section 12(3)(b), which is concerned about the submission of incorrect or incomplete return. It must be noted herein that the accounts maintained by the assessee is of relevance not just on the turnovers disclosed. The accounts are relevant even as regards the character of the transaction shown therein. 25. Section 2(p) of the Tamil Nadu General Sales Tax Act defines "Taxable turnover" to mean, the turnover on which a dealer shall be liable to pay tax as determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t penal provisions. Thus going by the Explanation to Section 12(3)(b) of the Act, estimation of turnover and rejection of claim for exemption or concessional rate, which are subject to the furnishing of declaration forms, would not invite penal provisions and that actual suppressions alone would attract penal provision. Since the explanation to the said provision was inserted under Act 60 of 1997, effective only from 1.4.1998, the benefit of the same could not be extended to the assessee herein. Thus, the accounts maintained by the assessee is of relevance both on the aspect of the nature of transaction stated therein as well as to the turnover given therein for the purpose of understanding Section 12(3) of the Tamil Nadu General Sales Tax Act. 27. It is admitted by the assessee herein that the turnover of Rs.49,06,107/- treated as local sales in the assessment, was considered by the Appellate Assistant Commissioner. On this, the turnover of Rs.21,62,834/- was exempted as export turnover on the basis of the materials produced by the assessee. However, in respect of the balance of the turnover, the claim of the assessee that it represented purchase from outside the State, the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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