1983 (7) TMI 297 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of suppressed turnover and penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959.
2. Revisional powers of the Board of Revenue under section 34 of the Act.
3. Burden of proof on Revenue for escapement of turnover.

Detailed Analysis:
1. The case involved dealers in toor dhal and gram dhal who filed A-2 returns for 1970-71, showing a total and taxable turnover of Rs. 15,50,748.74. During an inspection, 27 slips were found with unaccounted transactions totaling Rs. 73,617.65. The assessing authority added twice the actual suppressions found to the turnover, totaling Rs. 1,47,235.30, and imposed a penalty of Rs. 3,312 under section 12(3). The Appellate Assistant Commissioner reduced the additions to Rs. 10,000 and set aside the penalty. The Board of Revenue, using suo motu powers, increased the additions to Rs. 32,000.90 and sustained a penalty of Rs. 1,454, leading to an appeal by the assessees.

2. The assessees contended that the Board of Revenue should not have interfered with the factual findings of the Appellate Assistant Commissioner, citing the principle from a previous case. The Board of Revenue, however, reviewed each slip and identified actual suppressions amounting to Rs. 32,970, justifying the increase in additions. The Board's scrutiny of the slips and rejection of the assessees' explanation for specific slips were deemed valid, upholding the additions made.

3. While the assessment on the suppressed turnover of Rs. 32,970 was upheld, the penalty imposition by the Board of Revenue at 1 1/2 times the tax due was deemed excessive. The Board was noted to have the discretion to impose a penalty not exceeding 1 1/2 times the tax due. The High Court, acting as an Appellate Court, reduced the penalty to 50% of the tax due on the suppressed turnover, amounting to Rs. 485, exercising discretion over the Board's decision. The tax case was partly allowed to this extent, with no order as to costs.