1998 (2) TMI 560 - HC - VAT and Sales Tax

Summary

Issues:
Imposition of penalty under section 12(5)(ii) for failure to submit proof of tax payment along with monthly returns during the assessment year 1986-87.

Analysis:
The case involved an appeal against the penalty imposed by the Assistant Commissioner for failure to submit proof of tax payment along with monthly returns. The assessee-dealers, Tvl. Indian Oil Corporation Ltd., filed monthly returns within the prescribed period but did not submit proof of tax payment for three months during the assessment year 1986-87. The penalty imposed amounted to Rs. 3,26,116 under section 12(5)(ii) of the Tamil Nadu General Sales Tax Act, 1959 (TNGSTA).

The Deputy Commissioner and the Tribunal upheld the penalty, stating that the assessing authority rightly invoked the relevant provision of the TNGSTA. The Tribunal's decision led to the present action, Tax Case (Revision) No. 622 of 1995, challenging the sustainability of the penalty under section 12(5)(ii).

The key question before the court was whether the penalty imposed by the Tribunal was sustainable in law. The court noted that the assessee-dealers failed to submit proof of tax payment along with the monthly returns, as required by the TNGSTA. The violation of this provision attracts a penalty under section 12(5)(ii) of the Act.

The court analyzed the relevant rules, specifically Rule 18(2) and Rule 18(4-A) of the Tamil Nadu General Sales Tax Rules, 1959. It emphasized that the assessee-dealers must file both monthly returns and a consolidated return in Form A-1 within the prescribed timelines. Failure to provide proof of tax payment with the monthly returns constitutes a violation of the law, leading to the imposition of a penalty.

The court concluded that the penalty imposed was justified under section 12(5)(ii) of the TNGSTA. It upheld the minimum penalty of two per cent of the tax payable for each month of default, as specified by the law. Consequently, the tax case (revision) was dismissed, with no order as to costs, based on the facts and circumstances of the case.