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TMI Blog2017 (6) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1.These revision petitions pertain to the assessment years 2001-02 and 2002-03. 2.2.The revision petitions were admitted on 19.09.2014, when, the following common question of law was framed: "Whether penalty under Section 23 of the Tamil Nadu General Sales Tax Act is imposable when the ingredients of Section 45(2)(e) of the Tamil Nadu General Sales Tax Act, more particularly the words fails without reasonable excuse to make use of the goods for the declared purpose , has not been satisfied" 2.3.During the course of arguments, learned counsels for the parties agreed that an additional question of law, ought to be framed, which is: "Whether in the given facts and circumstances of the case, under Section 23 of the 1959 Act, the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner by a common order dated 29.12.2004, consciously, set aside penalty, in respect of, both the assessment years. 4.The Revenue, being aggrieved, carried the matter in appeal to the Tribunal. The Tribunal after examining the matter at length, came to the conclusion that the concessional rate of tax was available against Form XVII only in respect of those Assessees' who manufactured their own goods. 4.1.The Tribunal found that JTP had processed yarn and cloth, which was supplied to its buyers/customers and therefore, in terms of Section 3(3) of the 1959 Act, it was not entitled to the concessional rate of tax. Based on this reasoning, the Tribunal came to the conclusion that there was a clear violation of Section 45(2)(e) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave interfered in the matter. 7.Mr.Annamalai, on the other hand, largely relied upon the order of the Tribunal. 7.1.It was the learned counsel's submission that concessional rate of tax could not have been availed of, by JTP, in view of the fact that it had only processed the cotton fabric, albeit, on job work basis, which activity took it out of the ambit of Section 3(3) of the 1959 Act. 7.2.Learned counsel further submitted that in view of the clear violation of the provision of Section 3(3) of the 1959 Act, the First Appellate Authority, i.e., AAC, rightly, sustained the order of the Adjudicating Authority, whereby, penalty was imposed. 8.We have heard the learned counsels for the parties and perused the record. 9.Before we proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the First Schedule, other than those falling under item 56 in Part D of the said Schedule . The expression item 22 in Part D mentioned in the Amendment Act 38/96 is apparently an error for item 23 in Part D By making amendment vide Note 1 above the error thus being rectified. 3: The expression sub-section (2) or (2-A) was substituted for the expression Sub-section (2) by Act 47/2002 Gazette dated 18.11.2002 Effective from 27.3.2002 (Retrospective). By the same amendment Act 47/2002, the expression sub-section (2), (2-A) or (2-C) was substituted for the expression sub-section (2) or (2-A) with effect from 1.7.2002 (Retrospective)." 9.1.A perusal of Section 3(3) of the 1959 Act, would show that an Assessee can avail of the concessional r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Mr.Annamalai, which is a fact, that emerges from the record as well. 12.The question, therefore, is, as to whether in these circumstances, penalty ought to have been imposed and if so, at what rate. 12.1.In this behalf, the provisions of Section 23 and 45 (2)(e) of the 1959 Act become relevant. The relevant parts of the same are therefore, extracted hereafter, for the sake of convenience: "Section 23. Levy of penalty in certain cases. - If any person purchasing goods is guilty of an offence under clause (e) of sub-section (2) of section 45, the assessing authority, may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and a half times the tax p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot disclose, as to how, he came to the conclusion in the given facts and circumstances of the case that penalty ought to be levied at the maximum rate. 12.6.The fact that there was a violation, would not necessarily mean, that in every case penalty would have to be levied at the maximum rate. 12.7.Given the facts and circumstances obtaining in this case, the Adjudicating Authority ought to have discussed this aspect of the matter. This is specially so, as Section 23 of the 1959 Act, provides for discretion qua, the quantum of levy of penalty as well. 12.8.As indicated above, since the First Appellate Authority, i.e., AAC, reversed the view of the Adjudicating Authority on merits and hence, concluded that no penalty was leviable. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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