1973 (1) TMI 92 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Board of Revenue to levy penalty under section 12(3) in exercise of suo motu powers.
2. Validity of penalty levied by the Board of Revenue after the assessing authority failed to exercise power under section 12(3).
3. Applicability of previous court decisions on similar cases.

Detailed Analysis:
1. The main issue in this case is the jurisdiction of the Board of Revenue to levy a penalty under section 12(3) of the Tamil Nadu General Sales Tax Act using its suo motu powers. The appellant argued that the Board of Revenue cannot pass an original order of penalty, which should have been done by the assessing authority under section 12. The appellant cited previous court decisions to support this argument, emphasizing that penalty under section 12(3) is part of the assessment proceedings and cannot be levied independently.

2. The validity of the penalty imposed by the Board of Revenue was questioned due to the failure of the assessing authority to exercise its power under section 12(3) during the original assessment. Previous court cases were cited to illustrate that penalty should be considered during the assessment process and cannot be imposed separately after the assessment is completed. The court highlighted that the assessing authority's failure to pass an order under section 12(3) does not grant the Board of Revenue the power to pass an original order of penalty.

3. The court referred to two previous court decisions, State of Madras v. Ramulu Naidu and Abdul Waheed v. Commissioner of Commercial Taxes, to support its decision. In the State of Madras case, it was held that the levy of penalty under section 12(3) is part of the assessment proceedings, and the assessing authority cannot independently impose a penalty after completing the assessment. Similarly, in the Abdul Waheed case, it was determined that the Board of Revenue cannot set aside an assessment order solely because the assessing authority overlooked the provisions of section 12(3) during the assessment process.

In conclusion, the court held that the Board of Revenue exceeded its jurisdiction by levying a penalty under section 12(3) using suo motu powers when the assessing authority had not exercised its power during the original assessment. The court set aside the order of the Board of Revenue, emphasizing that the assessing authority must consider penalty provisions during the assessment process, and the Board cannot pass an original order of penalty in such circumstances. The appeal was allowed, and there were no costs awarded.