1984 (4) TMI 272 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of suppressed turnover and penalty imposition for the assessment year 1969-70.
2. Assessment of suppressed turnover and penalty imposition for the assessment year 1971-72.
3. Legality of penalty imposition by the Tribunal after the Appellate Assistant Commissioner set aside the penalty.

Analysis:
1. For the assessment year 1969-70, the assessee was initially assessed on a total taxable turnover. Subsequently, it was found that the assessee had suppressed a significant sales turnover, leading to a revised assessment and imposition of penalty under the Tamil Nadu General Sales Tax Act. The Appellate Assistant Commissioner upheld the suppression partially but struck down the penalty due to lack of evidence of wilful non-disclosure. The Sales Tax Appellate Tribunal confirmed the suppression, adjusted the taxable turnover, and imposed a reduced penalty based on the suppressed turnover. The Tribunal's decision on penalty imposition was challenged in a revision petition by the assessee. The High Court held that the Tribunal had no authority to restore the penalty when the Appellate Assistant Commissioner had completely set it aside. Consequently, the penalty imposed by the Tribunal was set aside, while the rest of the Tribunal's findings were upheld.

2. In the assessment for the year 1971-72, a similar scenario unfolded where the assessee was assessed for suppressed turnover, and a penalty was imposed by the assessing authority. The Appellate Assistant Commissioner upheld the suppression but set aside the penalty due to the absence of evidence of wilful non-disclosure. The Sales Tax Appellate Tribunal affirmed the suppressed turnover, adjusted the taxable turnover, and imposed a penalty based on the suppressed turnover. The Tribunal's decision on penalty imposition was challenged in a revision petition by the assessee. The High Court reiterated that the Tribunal lacked the power to reinstate the penalty when the Appellate Assistant Commissioner had nullified it. Consequently, the penalty imposed by the Tribunal was set aside, while the other aspects of the Tribunal's decision were upheld.

3. The legal issue of penalty imposition by the Tribunal after the Appellate Assistant Commissioner had annulled the penalty was extensively discussed in both cases. The High Court relied on precedent and observed that since the Appellate Assistant Commissioner had entirely set aside the penalty, there was no penalty to enhance or reinstate by the Tribunal. Consequently, the Tribunal's imposition of penalties in both cases was deemed unlawful, and the revisions filed by the assessee were allowed solely concerning the penalty levied by the Tribunal. The High Court did not find any justification to interfere with the remaining findings of the Tribunal, and no arguments were presented challenging those aspects. The High Court set aside the Tribunal's penalty imposition while confirming the rest of the Tribunal's findings in both cases.