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2008 DIGILAW 3912 (MAD)

ERSHATH TRADERS v. STATE OF TAMIL NADU.

2008-10-28

K.K.SASIDHARAN, PRABHA SRIDEVAN

body2008
JUDGMENT MRS. PRABHA SRIDEVAN, J. - In this matter, two questions are raised with regard to the liability to tax and also penalty under section 12(3)(b). Now, the learned counsel restricts his case only to the question of levy of penalty under section 12(3)(b). Heard both sides. In this case, the assessment has been made on the basis of the books of account produced and the learned counsel for the appellant relies on Appollo Saline Pharmaceuticals (P) Ltd. v. Commercial Tax Officer (FAC) reported in [2002] 125 STC 505 (Mad) wherein this court has held as under : "7. Though other sub-sections of section 12 were amended by the State Legislature subsequent to the date of the judgment in the case of S. G. Jayaraj Nadar & Sons [1971] 28 STC 700 (SC), section 12(1) and 12(2) has remained in the same form. The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and 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 not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after 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). 8. The assessments for the assessment years 1993-94 and 1994-95 which were assessments made on the basis of the accounts, and not based 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." As rightly submitted by the learned counsel for the petitioner, once the books of account have been produced and the assessment is made thereon, then the assessment could not be regarded as best judgment assessment. Following Appollo Saline case [2002] 125 STC 505, this tax case is allowed only in regard to levy of penalty under section 12(3)(b). In the result, the tax case is partly allowed. No costs.