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TMI Blog2019 (5) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... inks. For the Assessment Year TNGST 2003-04, the Petitioner paid a sum of Rs. 62,215/- along with the returns. Thereafter, the Respondent issued a notice dated 14.05.2006 to the Petitioner proposing to impose penalty under Section 12(3)(b)(iv) at 125% in view of the difference between the amount that was paid as tax and the amount due towards tax as determined by the Respondent. On receipt of the said notice, the Petitioner requested the Respondent not to proceed with the imposition of penalty and also undertook to remit the balance of re-sale tax. In order to show his bona fides, the Petitioner remitted a sum of Rs. 20,000/- by way of cheque dated 05.07.2006 in favour of the Respondent. Meanwhile, the impugned order dated 26.06.2006 was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be, in the case of submission of incorrect or incomplete return, - (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 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 fifteen per cent but n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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. Subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be imposed and also undertook to remit the balance of the resale tax amount. In that connection, it was submitted that the Petitioner remitted a sum of Rs. 20,000/- by way of cheque dated 05.07.2006, which is also included in the typed set of papers. 8.On considering the affidavit, documents on record and oral submissions, it is very clear that the Assessing Officer proceeded to impose penalty by impugned order dated 26.06.2006 without rejecting the return filed by the Petitioner. This course of action is contrary to the provisions of Section 12(2) of the TNGST Act. Consequently, penalty cannot be imposed under Section 12(3) of the said Act. As correctly contended by the learned counsel for the Petitioner, the Hon'ble Division Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X
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