TMI Blog2016 (9) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... f 4%, tax has been paid. In such circumstances, it cannot be contended that it is a deliberate and wilful non-disclosure of turnover, in the return and thus, rightly proceeded, under Section 12(3)(b) f the Act, which deals with Submission of incorrect or incomplete return - penalty not imposed - appeal allowed - decided in favor of appellant. - Tax Case (Revision) No. 186 of 2009 - - - Dated:- 28-7-2016 - S. Manikumar And D. Krishnakumar, JJ. For the Petitioner : Mr. K. Soundarajan For the Respondent : Dr. Anitha Sumant ORDER ( Order of the Court was made by S. Manikumar, J. ) Tax Case (Revision) No.186 of 2009, is directed against the order made in TA No.230 of 2008 dated 27.07.2009 on the file of the Tamilnadu Sales Tax Appellate Tribunal (Additional Bench), Chennai. 2. Facts as deduced from the material on record are that Tvl.Shyam Air Fridge, Vellore, the revision petitioner, during the assessment year 2004-05, reported a total and taxable turnover of ₹ 56,47,042/- under the TNGST Act. The Deputy Commissioner (CT), Vellore Division, Vellore, while finalizing the assessment had treated the contract receipt of ₹ 3,74,000/- as sale of Spl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed under sub-clause (iii) of the Explanation to section 12(3)(b) of the Tamil Nadu General Sales Tax Act. Moreover, the assessment year involved herein is 2003-04, subsequent to the amendment made in Section 12(3)(b) of the Tamilnadu General Sales Tax Act, by Act 22/2002. Therefore, the contention put forth by the appellant is not legally sustainable. Hence, we ordered to reject the claim as one possessing no legal support and thus ordered to dismiss the Tribunal Appeal . 5. Aggrieved over the same, the present Tax Case Revision is filed. Record of proceedings shows that this Court has admitted the revision, on the following substantial question of law, Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in applying Explanation (iii) to Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, to sustain the levy of penalty, despite the fact that the petitioner has opted for compounding of tax under Section 7C of the Tamil Nadu General Sales Tax Act? 6. Mr.K.Soundarajan, learned counsel for the revision petitioner contended that there is no concealment in the books of accounts and the same is reported to the department. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, the revision petitioner/assessee has specifically contended that explanations (i) and (ii) to Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, would be applicable to the case on hand, as the turnover was not suppressed by the assessee and that the same was treated only as contract receipts, and reported in the monthly A-1 return, before the Tribunal and accordingly, tax paid at 4% is correct. 11. Before the Tribunal, the assessee has further stated that as per the explanation clauses, the tax arrived at, on the turnover, should be deducted from the tax assessed on the final assessment and thereafter, the difference should be calculated for the purpose of penalty, taking note of the explanation to Section 12(3) of the Act. 12. Indisputably, the assessee paid tax at 4% on the turnover, claiming composite works contract, under Section 7C of the Tamil Nadu General Sales Tax Act. The appellate authority has accepted that the transaction is a works contract. As per Section 7C of the Act, notwithstanding anything contained in Section 3-B, every dealer, referred to in item (vi) of clause (g) of section 2, may, at his option, instead of paying tax, in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer of property involved in the execution of works contract shall, on and from the 26th day of June 1986, be arrived at after deducting the following amounts from the total turnover of that dealer:- (a) all amounts involved in respect of goods involved in the execution of works contract in the course of export of the goods out of the territory of India, or in the course of import of the goods into the territory of India or in the course of inter-State trade or commerce: (b) all amounts for which any goods, specified in the First Schedule or Second Schedule, are purchased from registered dealers liable to pay tax under this Act and used in the execution of works contract in the same form in which such goods were purchased: (c) all amounts paid to the sub-contractors as consideration for execution of works contract whether wholly or partly: (d) all amounts paid to the sub-contractors as consideration for execution of works contract whether wholly or partly: Provided that no such deduction shall be allowed unless the dealer claiming deduction, produces proof that the sub-contractor is a registered dealer liable to pay tax under this Act and that the turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority without any reference to any specific concealment of turnover from the accounts; (ii) Any turnover estimated by the Assessing Authority with reference to any specific concealment of any turnover from the accounts; (iii) Any turnover on which tax is paid at the concessional rate subject to the condition of furnishing any declaration but where such declaration could not be furnished at the time of assessment. 16. Section 12(3)(b) of the Act deals with, submission of incorrect or incomplete return and for the purpose of levy of penalty, under Clause (b), the tax assessed on the following kinds of turnover shall be deducted from the tax assessed on final assessment, (i) twenty-five per cent of the difference of the tax assessed and the tax paid as per return, if the tax paid as per the return falls short of the tax assessed on final assessment by not more than five per cent; (i-a) fifty per cent of the difference of the tax assessed and the tax paid as per return, if the tax paid as per the return falls short of the tax assessed on final assessment by more than five per cent but not more than fifteen per cent; (ii) seventy-five pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifies the turnover which merited to be excluded for the purpose of levy of penalty, one such being the turnover representing addition related to book turnover itself. Thus, even while calculating the turnover for the purpose of levy of penalty, the turnover, which are already available in the books of accounts are to be excluded and only those turnover which are estimated having reference to a specific concealment alone, the purpose of addition, invite the penal provisions under the Tamil Nadu General Sales Tax Act, 1959. In the decision reported in [2002] 125 STC 505 (Mad) (Appollo Saline Pharmaceuticals (P) Limited v. Commercial Tax Officer (FAC)) this court pointed out that when the assessment is based on the accounts turnover, the question of levy of penalty does not arise. 9. In the circumstances, applying the said decision reported in [2002] 125 STC 505 (Mad) (Appollo Saline Pharmaceuticals (P) Limited v. Commercial Tax Officer (FAC)) and the Explanation to section12(3)(b) of the Tamil Nadu General Sales Tax Act, the order of the Sales Tax Appellate Tribunal in levying penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 is set aside and the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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