1983 (2) TMI 266 - HC - VAT and Sales Tax

Summary

Issues:
1. Applicability of penalty under section 12(5) of the Tamil Nadu General Sales Tax Act, 1959.
2. Interpretation of section 12(4) in relation to incorrect returns and correct accounts.
3. Consideration of penalty under sub-sections (3) and (5) of section 12 simultaneously.
4. Analysis of the proviso to sub-section (5) of section 12 and the non obstante clause in sub-section (4).

Analysis:
The judgment of the High Court of Madras involved a revision against the penalty imposed on the assessee under section 12(5) of the Tamil Nadu General Sales Tax Act, 1959. The assessing authority had determined a higher taxable turnover than what was initially returned by the assessee. The penalty was imposed for non-disclosure of turnover in the A-2 returns, even though it was present in the accounts, leading to a discrepancy. The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal upheld the penalty, albeit reducing the amount from the original levy.

The main contention raised was whether section 12(5) could be invoked when the returned turnover was not accepted by the assessing authority. The Court analyzed the application of section 12(4), which allows assessment based on correct accounts when the return is found to be incorrect or incomplete. In this case, since the assessing authority deemed the accounts to be correct and the return incorrect, section 12(4) was applicable, leading to the imposition of penalty under section 12(5)(iii).

The Court also clarified that section 12(4) operates in situations where there is a discrepancy between incorrect or incomplete returns and correct accounts. The proviso to section 12(5) was highlighted, indicating that penalties can be levied under both sub-sections (3) and (5) if warranted by the facts. Additionally, the significance of the non obstante clause in section 12(4) was emphasized, supporting the Tribunal's decision.

Ultimately, the Court agreed with the Tribunal's interpretation and dismissed the tax revision case, affirming the imposition of the penalty under section 12(5) based on the correct application of the relevant provisions of the Act.