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2009 DIGILAW 5014 (MAD)

LINGAM AND SONS v. STATE OF TAMIL NADU.

2009-11-19

P.P.S.JANARTHANA RAJA, R.BANUMATHI

body2009
ORDER MRS. R. BANUMATHI, J. - This revision is directed against the Sales Tax Appellate Tribunal (STAT) in MTA No. 81 of 1999 confirming the levy of penalty under section 12(3) of the Tamil Nadu General Sales Tax Act. The assessee had been assessed on a total and taxable turnover of Rs. 4,59,306 and Rs. 4,27,133, respectively, as against the reported total and taxable turnover of Rs. 3,73,805 and Rs. 2,91,632, respectively, for the year 1996-97 based on the defects noticed at the time of checking of accounts. Upon scrutiny, it was noticed that the assessee had not accounted for certain inter-State purchases of granite tiles effected to the extent of Rs. 1,35,500. While making assessment, the assessing officer brought the sales of granite tiles at Rs. 1,35,500 by adding the lorry freight and gross profit on the purchase of granite tiles. The assessing officer also levied penalty under section 12(3) of the Act. Aggrieved by the order of the assessing officer, the petitioner filed an appeal before the Appellate Assistant Commissioner (CT) who dismissed the appeal. Still aggrieved, the assessee filed an appeal before the STAT. Confirming the levy of penalty, the STAT has dismissed the appeal. In this revision, the only issue relates to levy of penalty under section 12(3) of the Act. The question falling for consideration is that when the entire amount of tax was paid by the petitioner by cheque dated January 7, 1998 before completion of assessment, whether levy of penalty under section 12(3) of the Act is in order. Mr. V. Sundareswaran, learned counsel for the petitioner, contended that the petitioner had made payment by way of cheque (No. 697629) dated January 7, 1998 even prior to the passing of the order and while so, in view of the decision in Chennai Textile Chemicals Private Ltd. v. State of Tamil Nadu reported in [2002] 125 STC 107 (Mad), the levy of penalty was not warranted. It was further submitted that even though, payment of entire amount was brought to the notice of the AAC (CT) and also the Tribunal, the authorities have not kept in view the payment made by cheque dated January 7, 1998. We have heard Mr. Haja Nazirudeen, Special Government Pleader (Taxes). It was further submitted that even though, payment of entire amount was brought to the notice of the AAC (CT) and also the Tribunal, the authorities have not kept in view the payment made by cheque dated January 7, 1998. We have heard Mr. Haja Nazirudeen, Special Government Pleader (Taxes). Drawing our attention to the order of the AAC (CT), learned Special Government Pleader submitted that if the presentation of cheque (No. 697629) on January 7, 1998 is true, then the petitioner could have pointed out the same before the assessing officer. It was further submitted that as seen from the assessment order and the order of the AAC (CT), the petitioner has not produced any material to show that cheque was presented prior to passing of the order. In the typed set of papers, the letter of the petitioner dated January 7, 1998 enclosing cheque No. 697629 dated January 7, 1998 for Rs. 14,905 has been filed. Before us, the learned counsel for the petitioner has also produced bank statement of accounts of the petitioner indicating encashment of cheque No. 697629 for Rs. 14,905 on January 10, 1998. As per the assessment order (January 8, 1998), the balance tax payable was only Rs. 10,332 whereas even on January 7, 1998, the petitioner has given cheque bearing No. 697629 for Rs. 14,905. Even though, the cheque for Rs. 14,905 was encashed on January 10, 1998, it relates back to the date of cheque. In Chennai Textile Chemicals Private Ltd. v. State of Tamil Nadu [2002] 125 STC 107, the Division Bench of this court held as under : "21. ... Even though in a given case or more than one case, the quantum of turnover suppressed or the tax sought to be avoided also, at times, may be one and the same, if the particular assessee, at the time of final assessment, found to have otherwise paid any amount already before such final assessment, sufficient to go to reduce the tax liability ultimately determined, the imposition of penalty to that extent is reduced. ..." Since cheque bearing No. 697629 dated January 7, 1998 for Rs. 14,905 was given by the assessee even on January 7, 1998, as per the above decision, levy of penalty under section 12(3) of the Act is not justified. ..." Since cheque bearing No. 697629 dated January 7, 1998 for Rs. 14,905 was given by the assessee even on January 7, 1998, as per the above decision, levy of penalty under section 12(3) of the Act is not justified. Both the AAC (CT) and the STAT have not taken note of the payment of the amount by way of cheque dated January 7, 1998 and therefore, the impugned orders cannot be sustained. In the result, the orders passed by the Appellate Assistant Commissioner (CT) and Sales Tax Appellate Tribunal are set aside and the revision is allowed. No costs.