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State of Tamil Nadu Versus Steel Tube Traders and Agencies

2015 (4) TMI 1125 - MADRAS HIGH COURT

Levy of penalty - under-reporting of sales turnover - bonafide error - Held that:- A reading of the order of the Tribunal reveals that, on facts, there is no dispute that there was no wilful non-disclosure, but the claim for deduction from the total turnover, viz., the component of sales tax collected, was negatived, as the assessee did not produce any material in support of their claim.

Insofar as levy of penalty is concerned, the finding and the reasoning of the Tribunal affirming t .....

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bunal dated 29.11.2002 made in C.T.S.A.No.427 of 2000 on the file of the Sales Tax Appellate Tribunal (AB), Coimbatore. 2. The primary issue on which the assessment order was passed relates to the disallowance of the claim of deduction of sales tax collected by the dealer from the total turnover of the dealer. 3. The brief facts of the case are as follows: The assessee/respondent are dealers in pipes and pipe fittings. For the assessment year 1991-92, the Assessing Officer had completed the asse .....

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llections and wages paid. Consequently, the Assessing Officer also levied penalty. Aggrieved by the said order of the Assessing Officer, the assessee preferred an appeal before the Appellate Assistant Commissioner, who upheld the assessment made on Sales tax and surcharge collection, but deleted the levy of penalty. Aggrieved by the said order, the assessee preferred further appeal before the Tribunal. 4. The Tribunal, on a careful consideration of the submissions made, confirmed the order of th .....

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ut also the tax payable on the sale and the quantum of tax payable. On further perusal of the assessment records, we could find only the bills relating to second sale items of goods (no tax bill) filed in the asst. records and not the taxable bill (First Sales). Further, the learned Authorised Representative has expressed his inability to produce the above material records so as to enable the Tribunal to verify and ascertain the fact that the amount shown in the bill is 'inclusive of tax' .....

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ccounts and there was no element of willful non-disclosure of turnover. Placing reliance on the decision reported in 91 STC 112 (P.Subba Reddy V. State of Tamil Nadu) and 104 STC 61 and 94 STC 120, the Tribunal held as follows: "25. With regard to the penalty, the learned Additional State Representative, would argue that the deletion of the above penalties are not correct as the tax levied on the actual suppressions has been upheld. The learned Authorised Representative would contend that t .....

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to be non-taxable at the time of initial assessment. Hence the Assessing Officer cannot create a penalisation under section 16(2) of the Act. Just because an assessment was created on the turnover impugned, it will not mean that the element of 'wilfulness' was attributable thereon attracting a penalisation u/s.16(2) of the TNGST Act. The would also contend that the imposition of penalty during all the years of assessments was time barred and that the penalties were imposed much after the .....

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of wilful nondisclosure of the turnovers from their getting taxed under the Act, shall not be possible. Hence, the penalisation created u/s. 16(2) of the TNGST Act is to be held as illegal. Thus, the learned Appellate Assistant Commissioner has set aside the penalty so levied relying on the case laws reported in 104 STC 61 (Madras) and 94 STC 120, wherein, it was held that where the assessed turnover was found in the assessee's books of accounts, penalty cannot be imposed u/s.16(2) of the T .....

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of Section 12 of the Tamil Nadu General Sales Tax Act, 1959 penalty cannot be imposed after the period of five years from the expiry of the year to which the assessment relates". Further, it has been held as follows: "Under proviso to sub-section (5) of Section 12 of the Act, penalty cannot be imposed after the period of five years from the expiry of the order to which the assesssment relates. Thereis no dispute in this case that the assessment year in question is 1972-73. The penalty .....

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