TMI Blog2019 (12) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking the penal provisions are satisfied and there are clear findings by the assessing authority about mens rea or lack of bonafides on the part of the assessee in applying such provisions, the discretion employed by the Tribunal to delete the penalty cannot be held to be perverse. Prior to Assessment Year 1992-93, the judgment of this Court did not permit imposition of penalty in such cases, but from Assessment Year 1992-93 onwards, the judgment did not make it compulsory to impose penalty. Therefore, the argument of Revenue to that effect is misconceived. Since admittedly in the period of assessment of Assessment Year 1992-93 itself, the High Courts were seized of the controversy about the REP licences itself being treated as 'g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 12(5)(iii) is not at all correct. It is also further argued by the counsel for the respondent that, it is not as if for the year 1992/93 penalty under Section 12(5)(iii) for not reporting the turnover relating to REP license and non-payment of tax is automatic. In this connection, the counsel for the respondent relied upon the decision in 117 STC 457, wherein, the Hon'ble Supreme Court has clearly held that from 1.5.96, penalty is attracted. It is further argued on the side of the respondent that, when there was no intention to suppress the turnover, penalty is not attracted, and even after 1.5.96, if tax amount is not paid then only penalty is attracted. But in the case on hand, only under bonafide impression, even though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not taxable and so they did not report the same in the returns and pay the taxes. But, however, after the decision of the Supreme Court, when the respondent paid the taxes on the sales of REP licence penalty imposed paid the taxes on the sales of REP licence penalty imposed under Section 12(5)(iii) is not at all correct. In this connection, counsel for the respondent relied upon the decision of our Hon'ble High Court reported in 94 STC 139 wherein there is no direction given by our Hon'ble High Court to the authorities concerned to impose penalty for the year 1992/93 onwards. From the decision of our Hon'ble High Court, Chennai, the High Court has only given liberty to the assessing authorities to consider the issue relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o grounds to interfere with this findings in that regard. The point is accordingly answered. 3. Learned counsel for the State Mr.Shafiq submitted that the controversy with regard to the leviability of sales tax on the sales of REP licence was in the state of confusion and by the decision of the Karnataka High Court rendered in the case of [1992] 86 STC 175 (Bharat Fritz Werner Ltd. v. Commissioner of Commercial Taxes) , it was held that the REP licences are exim scrips falling within the definition of 'goods' and therefore the sale shall attract the provisions of the Sales Tax law, and the Madras High Court dealt with the said controversy for the first time in the case of P.S. Apparels vs Deputy Commercial Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) The levy of penalty under S e ction 12 o r 16 of the TNGST Act, 1959, shall be available to the assessing authorities in these categories of cases on and from assessment years 1992-93 onwards, and the authorities shall be at liberty to do so having regard to the facts and circumstances of each case on its own merits; (f) Subject to the declaration of law as above and directions contained herein, these writ petitions shall dismissed; and (g) There shall be no order as to costs. 4. Learned counsel for the State Mr.Shafiq therefore argued that vide clause (e) of Para 18 of the said judgment, the Madras High Court had held that the provisions for levy of penalty und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-93 onwards. Learned counsel for the State submits that the order of the learned Single Judge of the Karnataka High Court was dated 08.10.1991 and the order of the Division Bench was dated 16.04.1992. He therefore submitted that the learned assessing authority cannot be faulted with in invoking the provisions of Section 12(5)(iii) for Assessment Year 1992-93. 7. Having considered the submissions made by the counsel for Revenue, we are however not inclined to accept his submissions. The leeway given in paragraph 18 of the judgment of the Madras High Court, making it possible for the assessing authority to apply the penal provisions of Section 12(5)(iii) of the Act for the assessment year 1992-93 does not in any manner mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
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