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2009 DIGILAW 5322 (MAD)

STATE OF TAMIL NADU v. FAMCO ENTERPRISES.

2009-12-03

K.RAVIRAJA PANDIAN, M.M.SUNDRESH

body2009
JUDGMENT K. RAVIRAJA PANDIAN, J. - The writ petition is filed by the Department against the order of the Sales Tax Appellate Tribunal dated April 7, 1999 made in STA No. 37 of 1998 deleting the penalty levied under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 read with section 9(2A) of the Central Sales Tax Act, 1956 by the assessing officer and confirmed by the first appellate authority. The first respondent/assessee for the assessment year 1995-96 was assessed on a total and taxable turnover of Rs. 20,60,565 and Rs. 18,42,904 as against the reported total and taxable turnover of Rs. 21,32,166 and Rs. 19,14,505 besides levying penalty of Rs. 38,853 under section 12(3)(b) of the TNGST Act read with section 9(2A) of the CST Act. The first respondent being aggrieved by the order, filed an appeal before the Appellate Assistant Commissioner, who by his order dated March 3, 1998 modified the order of the assessing officer and set aside the turnover of Rs. 2,93,424 since the assessee had filed declaration forms to that extent and remitted the matter back to the assessing authority for fresh disposal. Regarding the balance turnover of Rs. 4,09,285 the appellate authority confirmed the assessment on the said turnover in the absence of the assessee filing the necessary C forms. As regards the penalty, the entire levy was set aside by the first appellate authority. The Department being aggrieved against that order, filed an appeal before the Sales Tax Appellate Tribunal disputing the cancellation of penalty under section 12(3)(b) of the TNGST Act read with section 9(2) of the CST Act. When the matter is taken up for orders, the counsel for the Department as well as the counsel for the assessee submitted that the issue has been covered by the Division Bench of this court in the case of Appollo Saline Pharmaceuticals (P.) Limited v. Commercial Tax Officer (Fac) reported in [2002] 125 STC 505 in favour of the assessee to the effect that the penalty levied under section 12(3)(b) of the TNGST Act read with section 9(2) of the CST Act cannot be levied in respect of the assessment made under section 12(1) of the TNGST Act. In the present case, the penalty has been levied only in respect of the assessment made under section 12(1) of the TNGST Act which is against the statutory provision as well as the law laid down by this court in the abovesaid judgment, wherein it was held thus : "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), sections 12(1) and 12(2) have 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." Hence, following the judgment referred to above, we are of the view that the order of the Tribunal deleting the penalty is quite in consonance with the statutory provision as well as the law declared by this court in the abovesaid judgment. We find no merit in this writ petition. Hence the same is dismissed.