TMI Blog2018 (4) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... V. Haribabu Additional Govt. Pleader (Taxes) ORDER ( Order of this Court was made by S. Manikumar, J. ) Tax Case Revision is filed to revise the order of the Sales Tax Appellate Tribunal (AB), Madurai, dated 20.12.2002 in Madurai Tribunal Appeal No.1067/2001 and 720/2001 of Tvl. Solaimalai Granites, Madurai for the assessment years 1997-98 and 1995-96. 2. Short facts leading to the Tax Case Revision are that the respondent is exporter and dealer in granite blocks. The dispute in the appeal in MTA.Nos.720 and 1067/01 was in respect of the turnover of ₹ 8,20,654/- and ₹ 18,10,200/-. The Commercial Tax Officer, Madurai Rural (South) Circle, Madurai, in his original assessment made for the year 1997-98, under TNGST Act, 1959, at the time of check of accounts, rejected the exemption claimed and assessed a turnover of ₹ 2,91,150/- at 11%, for the reasons that the sales of exporter within the State have not supported by proper documents. He also estimated the sales turnover for non-production of 13 taxes of Form XX obtained from the Commercial Tax Officer, Mahal Circular, Madurai at ₹ 14,30,000/-.Thus, he determined the total and taxable turnover at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XX for the year 1995-96 under TNGST Act, 1959 which were not produced before the Assessing Officer during the check of accounts and for the reason that two form xx delivery notes bearing serial no.333236 and 333237 received from checkposts, were not entry in the daybook. The learned Assessing Officer had treated this as sales omission and made estimation holding that the respective form xx would have been used during the respective assessment years 1997-98 and 1995-96 but the two forms have been omitted to be accounted for in their accounts for the year 1996-97. The above view of the learned Assessing Officer has also been accepted by the first appellate authority. The learned Authorised representative appearing for the appellants strongly contended that the observation of the learned lower authorities that they have not accounted for the transactions as per the form xx received from the checkposts are not correct. In fact in the reply given to the pre-assessment notice also they have mentioned that the transactions mentioned in the two form xx delivery notes were relating to the transport of goods effected to Tvl.Shenoy Granites(p) Ltd., Bangalore and these have been accounted for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Authorised Representative has produced the agreement entered into with them and as per the agreement they have to excavate granites from the site of Tvl. South India Corporation Ltd., at Keelaveerasigamani Village. Thus, it is proved that the appellants have utilised form XX said to be missing for the not doing transaction outside the account. The learned lower authorities had also not proved that the appellants have utilised the form XX for transporting the goods outside the account. In the above circumstances, we are of the view that the estimation made in respect of 13 forms for the year 1997-98, 100 forms for the year 1995-96 and tow forms for the year 1996-97 amounting to ₹ 14,30,000/- at 11% ₹ 82,49,100/- at 8% for the year 1995-96 and ₹ 2,20,000/- at 10.7% under TNGST Act 1959 (1997-98) and (1995-96) and CST Act, 1956 for the year 1996-97 respectively, under the respective appeals are not sustainable and accordingly, we order for the deletion of the above turnovers from assessment. 9. Point (ii): ₹ 17,23,703/- MTA No.720/01 Rs.2,35,960/- MTA No.1067/01 Rs.6,48,708/- MTA No.721/01 The next dispute arises for consideration is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the Tribunal ought to have seen that but for receipt of copy of Form XX delivery notes from the checkpost the transactions involved would not have come to light and suppression would have gone unnoticed. The Tribunal failed to follow the decisions reported in 96 STC 597 and 104 STC 535 which would squarely apply to the case on hand. Inasmuch as the assessment made is justified, the consequent levy of penalty is warranted in this case. 9. He further submitted that the Tribunal ought to have seen that the Assessing Officer had levied penalty, in as much as the dealers have not reported the above taxable turnover and paid tax as prescribed under the Act which amounts to filing of incorrect or incomplete return and hence, the assessment made falls under Section 12(2). Consequently, the levy of penalty under Section 12(3)(b) is automatic. 10. He has further submitted that the Tribunal erred in deleting the penalty as levy of penalty under Section 12(3)(b) is not called for in this case. As per the amended provisions of Section 12(3)(b) of the TNGST Act, levy of penalty is automatic and it should be levied when there is balance of tax payable to the government. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 7, held as follows:- 5. The Supreme Court in the case of State of Madras Vs. Jayaraj Nadar Sons {(1971) 28 STC 700, at page 701, after extracting Section 12 (2) of the Tamil Nadu General Sales Tax Act, 1959, which remains in the same form even now, observed thus:- The question is whether penalty can be levied while making the assessment under sub-Section (2) of the above Section merely because an incorrect return has been filed. The High Court was of the view that it is only if the assessment has to be made to the best of the judgment of the assessing authority that penalty can be levied. It seems to us that the High Court came to the correct conclusion because sub-sections (2) and (3) have to be read together. Sub-Section (2) empowers the assessing authority to assess the dealer to the best of its judgment in two events: (i). if no return has been submitted by the dealer under sub-section (1) within the prescribed period, and (ii). If the return submitted by him appears to be incomplete or incorrect. Sub-Section (3) empowers the assessing authority to levy the penalty only when it makes an assessment under sub-Section (2). In other words, when the assessing author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in the accounts, the question of invoking section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 would not arise. The Explanation to section 12(3)(b) of the Act specifies 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 Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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