1997 (10) TMI 371 - HC - VAT and Sales Tax

Summary

Issues:
Imposition of penalty under section 10A of the Central Sales Tax Act, 1956 on the turnover of the assessee-dealers for the assessment years 1990-91 and 1991-92.

Detailed Analysis:

1. Background and Registration: The assessee-dealers, registered under the CSTA, filed an application for registration in form "A" to avail concessional rates for inter-State purchases of goods like cement and iron. They received a certificate in form "B" based on this application, allowing them to purchase goods at a reduced tax rate of four percent.

2. Penalty Imposition: Instead of reselling the purchased goods, the assessee-dealers used them for constructing buildings for manufacturing cotton yarn. As a result, the Deputy Commercial Tax Officer imposed a penalty of eighteen percent on the turnover under section 10A of the CSTA, avoiding prosecution under section 10.

3. Appeals and Reduction of Penalty: The assessee-dealers challenged the penalty orders by filing appeals before the Appellate Assistant Commissioner, who reduced the penalty to twelve percent after reviewing the evidence on record.

4. Further Appeals to Tribunal: Unsatisfied with the reduction, the assessee-dealers appealed to the Tamil Nadu Sales Tax Appellate Tribunal. The Tribunal upheld the Appellate Assistant Commissioner's decision, leading to the filing of T.C. (R) Nos. 530 and 542 of 1995 by the assessee-dealers.

5. Court Decision: During the hearing, the Senior Counsel for the assessee-dealers expressed willingness to not contest the revisions on merits and requested a further reduction in the penalty due to the prolonged nature of the proceedings. The Government Advocate representing the Revenue did not object to this request.

6. Reduction of Penalty: Considering the submissions made by both parties, the Court decided to reduce the penalty imposed by the Tribunal from twelve percent to six percent on the turnover for the assessment years 1990-91 and 1991-92. The assessing officer was directed to collect the penalty at the revised rate of six percent.

7. Conclusion: The Court disposed of both tax case revisions, ordering the imposition of a reduced penalty of six percent on the turnover of the assessee-dealers for the relevant assessment years. No costs were awarded in the matter.

This judgment highlights the process of penalty imposition under the CSTA, the role of appellate authorities in reviewing penalties, and the Court's discretion in further reducing the penalty based on the circumstances of the case.