1994 (10) TMI 286 - 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. Methodology of estimating suppressed turnover.
3. Exigibility of penalty under section 12(3) for filing incorrect returns and suppressing turnover.

Analysis:
1. The judgment involves the assessment of suppressed turnover and the imposition of a penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959. The assessee, a proprietor of a jaggery business, filed a return for the assessment year 1984-85, disclosing a total turnover. The assessing authority determined higher turnovers and imposed a penalty for alleged suppression of turnover. The matter was appealed up to the Appellate Tribunal.

2. The assessing authority estimated the suppressed turnover by multiplying the purchase amount from a recovered bill into 36 times. The assessee contended that this method lacked a basis and was not in line with established legal principles for best judgment assessment. The Tribunal upheld the suppressed turnover determination at Rs. 97,200, finding the method reasonable given the circumstances and lack of alternative evidence from the assessee.

3. The issue of penalty under section 12(3) was also contested. The department argued that filing incorrect returns and suppressing turnover warranted the penalty. However, the assessee challenged the imposition of penalty citing precedents and emphasizing the lack of a definitive finding on wilfulness in the assessing officer's order. The Court referred to relevant judgments and held that without a clear finding of wilfulness in filing incorrect returns, the penalty under section 12(3) could not be levied. Consequently, the penalty was deemed not exigible and was deleted.

4. The Court's decision allowed the revision in part, reducing the penalty levied under section 12(3) of the Act. The judgment emphasized the necessity of a specific finding of wilfulness for imposing penalties in cases of suppressed turnover. The assessee's contentions regarding the methodology of estimating suppressed turnover were addressed, with the Court upholding the Tribunal's decision on the matter.