TMI Blog2018 (4) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... to revise the order of the Sales Tax Appellate Tribunal (Additional Bench) Chennai, dated 11.03.1997 passed in Tribunal Appeal Number 688/96 and Tribunal Miscellaneous Petition number 22/97. 2. Short facts leading to the Tax Case Revision are that the respondent, Tvl. Aditya Enterprises, dealers in Electrical goods, was finally assessed for a total and taxable turnover of ₹ 12,67,128/- and Rs.Nil respectively for the year 1992-93 under the Tamil Nadu General Sales Tax Act, 1959. The levy of penalty of ₹ 83,707/- was due under Section 16(2) of the said Act. 3. Aggrieved by the same, the respondent preferred an appeal in A.Nos.703 and 704 of 1995, before the the Appellate Assistant Commissioner(CT) - II, VI Floor, Kurulagam Annexe, Madras and Vide order dated 01.12.1995, modified the order by deleting the addition, as well as, restricting the penalty from 150% to 50%. 4. Aggrieved against the same, the state filed appeal in A.Nos.600 and 688 of 1996 before the Tamil Nadu Sales Tax Appellate Tribunal(Additional Bench), Chennai. Vide common order dated 11.03.1997, the same were dismissed. Revenue-II has filed Enhancement Petition Nos.704 of 1995 and 1995, before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the assessing authority and in as much as records were recovered from the place of business and residence of the partner of the appellant firm there is no gain saying in the fact by the appellant that they have no connection with the recovered records. In fact, they failed to offer convincing explanation as to how the records came to be recovered from the residence of one of the partners. 10. The appellants contended that they are not aware of the fact as to how the slips came to be recovered from the residence of the partner. The matter could not be explained property since the managing partner was not available at the time of inspection. However, this plea is not acceptable since the recovery of incriminating records had shown that they had such business dealings and the appellant had something to do with these transactions. It would be appropriate here to cite the case of Tvl.Nanak Glass works (1979) TC 961 TK 320 (Up) wherein it was laid down that the records having been recovered from the appellant's place it is for them to explain the transactions and the entries therein would have to be taken as those relating to the assessee. 11. Having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative evidence to suggest that the appellant had similar unreflected transactions in such goods other than what had been found in the incriminating records so as to make the case for probable omission. 14. It is further point that the recovery of records was sequal to search of residence of Thiru.S.Prabhakara Rao, partner of the appellant firm i.e. Aditya Enterprises. It is an admitted fact that the appellant firm i.e.Adita Enterprises were dealers in electrical goods and the taxable turnover was NIL for both the years in dispute. As such, the incriminating records were not recovered from the place of business so as to hold the doubt that the appellant firm itself had the dealings or gold jewellery and silver articles. The liability was fastened on the appellant firm for the reason that all the partners are jointly and severally responsible for the business. Moreover the inspection report says that there was no stock of goods during inspection. 15. Considering the nature of suppression highlighted and the various facts and circumstances of the case and the fact that the recovery of records was from the residence of the partner and not from the business premises, I hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had imposed in penalty notwithstanding the fact that the transactions business activity of the appellants and that the records recovered were not from the business premises but only from the residence of the partner. In the case reported in 69 STC 170 and 77 STC 118 it was laid down by the Courts of Law that the quantum of penalty should depend upon the gravity of offence and circumstances of the case, so also in the judgment reported in 48 STC 360 it was laid down that the order imposing penalty must show that the need for penalty as well as the quantum of penalty were considered judiciously and that maximum penalty should not mechanically be imposed in all the cases. 19. A more pertinent case is that of Govardhan Trading Co., V. State of Andhara Pradesh report (1995) 94 STC 1. It was held in this case that the approach that should be adopted in levying penalty should just and reasonable and only when there are aggravating circumstances with regard to the suppression of turnover that the sales tax authorities would be justified in levying the maximum penalty. Considering the facts and circumstances of the case and the judgments in this behalf I am of the opinion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnected records. 6. The assessing officer revised the assessment based on the details of the transactions as seen from book marked 'C'. The appellant deals the transactions. We have perused the records and found that book marked 'C' is nothing but bundle of slips. There are 22 slips. All the slips contain the transaction of gold and silver articles. These slips also certain expenses payment to various persons including labour charges. Further they also contain name of some important leading dealers in jewelleries in Chennai. It is not disputed that the appellants were exclusively dealing in electrical goods. We have perused the assessment records. The assessment records do not speak anything about the business activities of the appellants in jewelleries. It is also not disputed that the appellants are doing electrical goods throughout the business till closure. From the beginning the appellants denied the transactions. The lowers authorities held that the records were recorded at the time of search of the residence of one Thiru.Prabahar Rao who is the partner of the above concern. They also held that it is the duty of the appellants to explain the details of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the electrical dealers would have done such huge business in jewelleries without any infrastructure. In the absence of any categorical investigation, probe and enquiry, we are unable to accept the assessment made by the lower authorities on the basis of the records which contain different transactions not connected with the regular business of the appellants. We, therefore delete the assessment made in the revision proceedings for both years. 8. As the assessment are deleted penalty under Section 16(2) is also deleted for both years. 9. Regarding enhancement petition, as the appeals were allowed for the reasons detailed in the above paras we hold that the enhancement petitions are not entertainable. 12. Though Mr.Hari Babu, learned Additional Government Pleader (Taxes), made submissions seeking for reversal of the order of the Tribunal, on the grounds stated supra, we do not find any material irregularity or illegality in appreciation of the evidence, both by the Appellate Authority and Tribunal. Respondent is not a dealer of Silver and Gold Jewellery. 13. Assessing Officer has assessed the turnover, relating to silver and gold, as if they relate to the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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