1980 (9) TMI 251 - HC - VAT and Sales Tax

Issues Involved:
1. Redetermination of taxable turnover.
2. Levy of penalty.
3. Jurisdiction of the Tribunal to enhance penalty.
4. Permissibility of raising additional grounds in revision petitions.

Detailed Analysis:

1. Redetermination of Taxable Turnover:
The petitioner initially returned a taxable turnover of Rs. 2,50,868 for the assessment year 1972-73, which was determined by the Joint Commercial Tax Officer at Rs. 2,60,868. Upon inspection of the dealer's premises, officers recovered 7 slips indicating a suppressed turnover of Rs. 7,05,703. The managing partner admitted these slips related to the dealer's business. The Appellate Assistant Commissioner and the Tribunal upheld the addition to the turnover, concluding that the slips were indeed connected to the dealer's business. However, the petitioner contended that the slips did not relate to his business and thus should not affect the turnover. The Court allowed the petitioner to raise an additional ground based on the Supreme Court's decision in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi, arguing that the supply of food in the dealer's restaurant could not be regarded as a sale, and thus the turnover could not be included in the taxable turnover. The Court emphasized that the determination of whether a transaction constitutes a sale depends on whether the customer has the right to take away the uneaten portion of the food.

2. Levy of Penalty:
The Joint Commercial Tax Officer initially levied a penalty of Rs. 38,903 for the suppressed turnover. The Appellate Assistant Commissioner canceled the penalty, citing a lack of specific finding of willful non-disclosure. However, the Tribunal reinstated the penalty, albeit reduced to Rs. 1,500, concluding that the recovery of the slips indicated willful suppression of turnover. The Court, however, found that the Tribunal's order to levy a penalty was without jurisdiction as the Appellate Assistant Commissioner had set aside the original penalty entirely, leaving nothing to enhance.

3. Jurisdiction of the Tribunal to Enhance Penalty:
The Court referred to the precedent set in State of Tamil Nadu v. Jakthi Veliyeetakam, which held that the Tribunal's power to enhance penalties could only be invoked if there was an existing penalty to enhance. Since the Appellate Assistant Commissioner had set aside the penalty entirely, the Tribunal had no jurisdiction to entertain the revenue's petition for enhancement. Consequently, the order of the Tribunal imposing a penalty of Rs. 1,500 was set aside.

4. Permissibility of Raising Additional Grounds in Revision Petitions:
The petitioner sought to raise an additional ground based on a Supreme Court judgment that was rendered after the original assessment. The Court allowed this, noting that the dealer had consistently disputed the inclusion of the additional turnover. The Court emphasized that new points of law related to the disputed turnover could be raised in revision petitions. The Court also highlighted the importance of the Supreme Court's decision, which stated that the service of food in a restaurant does not constitute a sale if the customer does not have the right to take away the uneaten portion.

Conclusion:
The Court set aside the Tribunal's order regarding both the assessment and the penalty. The matter was remanded to the Tribunal for fresh disposal in light of the Supreme Court's decision. The Tribunal was instructed not to reconsider the penalty. The petitions were allowed with no order as to costs.

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