TMI Blog2018 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on any other material and were not estimates, have therefore, to be regarded as assessments made under Section 12(1) to which the penal provisions of Section 12(3) are not attracted. The levy of penalty for those two assessment years is set aside. Thus, penalty levied by disallowing the claim of exemption are deleted. Revision dismissed - decided against Revenue. - T. C. (R). No. 57 of 2017 - - - Dated:- 20-12-2017 - S. Manikumar And R. Pongiappan, JJ. For the Petitioner : Mr.S.Kanmani Annamalai for Additional Govt. Pleader(Taxes) ORDER ( Order of this Court was made by S. Manikumar, J. ) Tax Case Revision is filed against the order made in S.T.A.No.259 of 2005, dated 24.10.2008, on the file of the Tamil Nadu S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate has appealed before the Tamil Nadu Sales Tax Appellate Tribunal (AB), Chennai, which dismissed the same by confirming the order of the lower appellate authority. 3. Tax Case Revision is filed on the following substantial question of law:- Whether in the facts and circumstances of the case, the Tribunal in having confirming the order of the lower appellate authority by deleting the penalty based upon the decision reported in 28 STC 700 and 125 STC 505 is legally correct even after amendment carried out to Section 12(3) of the Tamil Nadu General Sales Tax Act 1959 by Tamilnadu Act 22 of 2002. 4. Supporting the above, Mr.S.Kanmani Annamalai, learned Additional Government Pleader (Taxes), submitted that the order of the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the explanations offered by them were not considered by the inspecting officers, that the stock were taken at haste, that the difference is very meager comparing to the volume of business and so they requested to drop the addition on this account. They also requested to drop the levy of penalty. The objections were carefully examined. Their contention that the interstate purchases have been accounted for in local purchases account by mistake is not an acceptable one and it cannot be viewed as mis-classification. But for inspection, there would have been huge loss of revenue. The willful suppressions has been proved. The stock difference of ₹ 5,61,964.00 is not meagre. The dealers have accepted the stock difference. Now they cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 6. The subject matter of the dispute in this appeal is the levy of penalty under section 12(3)(b) of Tamil Nadu General Sales Tax Act, 1959. Admittedly in this case, the assessment was made on the accounts furnished by the assessee. As per principle laid down by the Honble Supreme Court in the case of State of Madras Vs. Jayaraj Nadar (1971) 28 STC 700, and that in Appollo Saline Pharmaceuticals (P) Ltd., (2002) 125 STC 505, where the determination of the turnover was based on the assessees accounts and no addition was made to the book turnover exercising the Assessing Authoritys best judgment powers, there could be no penalty under section 12(3) of the Tamil Nadu General Sales Tax Act. 7. Therefore, there is no irregularity or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 recognized principles of justice. An element of guess work is bout to be present in best judgment assessment but it must have a reasonable nexus to be available material and the circumstances of each case (See The State of Kerala + V.C.Valukutty), where account books are accepted along with other records there can be no ground for making the best judgment assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgment assessment made on an estimate and no by relying solely on the accounts furnished by the assessee in the prescribed return. On and April 1, 1996 an explanation has been added below section 12(3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under section 12 (3). In view of the above penalty levied by the disallowing the claim of exeption are deleted. In fine, the appeal stands in AP.93/2004 Allowed and in AP.97/2004 Partly dismissed and Partly allowed. 15. The above c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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