1973 (6) TMI 56 - HC - VAT and Sales Tax

Summary

Issues:
1. Disputed turnover assessment for the year 1964-65.
2. Reduction of disputed turnover by the Tribunal.
3. Penalty imposition under section 12(3) of the Madras General Sales Tax Act.

Disputed Turnover Assessment:
The assessee was assessed for the year 1964-65 on a certain turnover, with a disputed turnover of Rs. 42,470. The assessing authority added this amount due to defects in the assessee's accounts, which were not adequately explained. The Tribunal agreed that the defects were not properly explained but felt the addition was excessive. The Tribunal reduced the addition to Rs. 15,000, deleting the excess Rs. 27,470. The revenue challenged this decision.

Reduction of Disputed Turnover:
The revenue contended that the Tribunal erred in reducing the addition to Rs. 15,000 as there was no basis for this restriction. However, the court upheld the Tribunal's decision, noting that the Tribunal had valid reasons for reducing the addition based on the defects and circumstances presented. The court found no justification to interfere with the Tribunal's estimation in this case.

Penalty Imposition under Section 12(3):
The revenue further argued that the Tribunal was wrong in setting aside the penalty imposed under section 12(3) of the Act. The court agreed with this contention, stating that since the Tribunal upheld the best judgment assessment and found no proof of suppression to evade tax, the penalty should have been confirmed. The court emphasized that a best judgment assessment automatically triggers the penalty provision under section 12(3), regardless of the willfulness of the suppression. Therefore, the court set aside the Tribunal's decision on the penalty and restored the assessing authority's penalty of Rs. 100. The tax case was allowed in part with no order as to costs.