1998 (12) TMI 568 - HC - VAT and Sales Tax

Issues Involved:
1. Determination of total and taxable turnover.
2. Validity of registration and its renewal.
3. Imposition of higher rate of tax.
4. Levy of penalties under sections 12(3) and 12(5)(ii) of the Tamil Nadu General Sales Tax Act, 1959.
5. Jurisdiction and authority of the Joint Commissioner in suo motu revision.

Issue-wise Detailed Analysis:

1. Determination of Total and Taxable Turnover:
The assessee reported a total and taxable turnover of Rs. 7,00,923 under the Central Sales Tax Act, 1956, for the assessment year 1991-92. The assessing officer confirmed this turnover, categorizing Rs. 6,49,380 to be taxed at 4% and Rs. 51,543 at 10%. The inspection revealed discrepancies in the C forms, leading to different tax treatments for sales before and after registration.

2. Validity of Registration and Its Renewal:
The place of business was inspected on September 18, 1991, revealing that the assessee had not registered the business until the inspection date. The business was registered post-inspection under both the Tamil Nadu General Sales Tax Act, 1959, and the Central Sales Tax Act, 1956. The appellate authority held that the assessee cannot be treated as an unregistered dealer due to the payment of renewal fees and penalty, thus allowing concessional tax rates.

3. Imposition of Higher Rate of Tax:
The appellate authority set aside the higher rate of tax, directing the assessing officer to allow a concessional rate of 3% if the C forms were valid. However, the Joint Commissioner in suo motu revision concluded that the inspecting officers had no authority to accept registration fees with penalties post the due date, thus reinstating the original higher tax rate.

4. Levy of Penalties under Sections 12(3) and 12(5)(ii) of the Tamil Nadu General Sales Tax Act, 1959:
The assessing officer imposed penalties under section 12(3) for suppressed turnover and under section 12(5)(ii) for delayed submission of monthly returns. The appellate authority set aside the penalty under section 12(3) due to the absence of a best judgment assessment but upheld the penalty under section 12(5)(ii). The Joint Commissioner revised the penalties, reducing them to 50% of the tax lost as penalty under section 12(3).

5. Jurisdiction and Authority of the Joint Commissioner in Suo Motu Revision:
The Joint Commissioner exercised suo motu revision, concluding that the appellate authority erred in treating the assessee as a registered dealer based on the collection of registration fees with penalties. The revisional authority restored the original order of the assessing officer and adjusted the penalties accordingly.

Conclusion:
The High Court acknowledged that the assessee was a registered dealer but had failed to renew the registration for four years. The court upheld the Joint Commissioner's decision regarding the invalidity of post-due date registration fee collection. However, the court remanded the matter back to the revisional authority to reconsider the imposition of penalties under section 12(3) of the Act, emphasizing that such penalties should be based on whether the assessment was made to the best of the assessing officer's judgment or based on the books of accounts. The appeal was allowed in part, with no order as to costs.

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