1994 (10) TMI 278 - HC - VAT and Sales Tax

Summary

Issues:
Assessment under Tamil Nadu General Sales Tax Act, 1959 - Levy of penalty under section 12(5)(iii) for incorrect return submission - Validity of revised return submission before completion of assessment.

Analysis:
The case involved an appeal by the assessee against the penalty levied under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959 for not including a taxable turnover in the original return. The assessing officer found a discrepancy in the turnover figures and imposed a penalty of Rs. 9,530. The Appellate Assistant Commissioner accepted the assessee's explanation that the mistake was due to office negligence and canceled the penalty. However, the Joint Commissioner II reversed this decision, stating that the original return cannot be revised after submission. The assessee contended that a revised return was filed before the final assessment, absolving them from the penalty.

The appellant argued that the revised return rectifying the mistake in the original return was submitted before the completion of the assessment, thus no penalty should be imposed under section 12(5)(iii) of the Act. Citing precedents like Bhavani Mills Limited v. State of Tamil Nadu, P.S. Srinivasa Iyengar & Sons, and Kalyani Agencies, the appellant claimed that penalties are not applicable when correct turnovers are disclosed through revised returns before final assessment orders. The Additional Government Pleader supported the Joint Commissioner's decision, stating that once an original return is filed with defects, it cannot be remedied through a revised return to avoid penalties.

After considering the submissions, the Court found the explanation provided by the assessee regarding the mistake in the original return acceptable. The Court opined that since the revised return was filed to rectify the error before the completion of the original assessment, no penalty should be imposed under section 12(5)(iii) of the Act. The Court relied on previous decisions to support this view and set aside the Joint Commissioner's order, reinstating the Appellate Assistant Commissioner's decision to cancel the penalty. Consequently, the appeal was allowed, and no costs were awarded.

In conclusion, the Court's judgment emphasized the importance of rectifying errors in returns before final assessments to avoid penalties under the Tamil Nadu General Sales Tax Act, 1959. The decision highlighted the significance of timely corrections and adherence to statutory provisions to prevent unnecessary financial liabilities on taxpayers.