1998 (8) TMI 570 - AT - VAT and Sales Tax

Issues Involved:
1. Detection of omissions and suppressions by the Enforcement Wing Officers.
2. Filing of a revised monthly return by the dealer.
3. Assessment of the dealer's turnover by the assessing authority.
4. Imposition of penalty for suppressed turnover.
5. Appeal and reduction of penalty by the Appellate Assistant Commissioner.
6. Tribunal's decision on the appeal regarding the levy of penalty.

Detailed Analysis:

1. Detection of Omissions and Suppressions:
The Enforcement Wing Officers inspected the petitioner's business premises on January 22, 1982, and detected several omissions and suppressions. Four anamath accounts marked as A, B, C, D, and 10 slips were recovered under D-7 receipt. The dealer had no explanation for the suppressions and promptly filed a revised return on March 28, 1982, showing all the suppressions under the head "omissions".

2. Filing of Revised Monthly Return:
The petitioner filed a revised monthly return on March 28, 1982, including the entire suppressions detected by the Enforcement Wing Officers. The revised return did not provide any explanation but simply included the suppressions in one sentence under "omissions".

3. Assessment of Turnover:
The assessing authority, after elaborately discussing the omissions with reference to the anamath accounts, proposed to assess the dealers to the best of his judgment. The proposed assessment highlighted the enormity of the suppressions and the boldness of the dealers' actions. The total turnover was fixed at Rs. 65,12,236.79 after taking note of exemptions allowed.

4. Imposition of Penalty:
The assessing authority proposed a penalty at 75 per cent of the suppressed turnover, noting that the dealer had not wilfully disclosed the following turnovers:
- Rs. 25,62,369 at 4 per cent tax due Rs. 1,02,495.00
- Rs. 20,17,047 at 3 per cent tax due Rs. 60,511.00
- Rs. 3,92,464 at 3 per cent tax due Rs. 13,736.00
The total tax due was Rs. 1,76,742.00. The penalty was levied at 75 per cent as proposed, considering that the dealer had maintained separate accounts and voluntarily paid the entire tax due on the actual suppressions.

5. Appeal and Reduction of Penalty:
On appeal, the Appellate Assistant Commissioner confirmed the order of the assessing authority except with regard to the penalty. The suppressions were deemed deliberate, and the penalty was reduced to 50 per cent of the suppressions. The Tribunal noted that the appellants had maintained two sets of accounts to evade tax, justifying the penalty imposed by the Appellate Assistant Commissioner.

6. Tribunal's Decision on Appeal:
The Tribunal considered the arguments that the penalty should not have been levied as the suppressed turnover had been disclosed in the regular accounts before the assessment. However, the Tribunal found that the assessment was based on the best judgment, including an estimation for probable cash sale suppressions of oil amounting to Rs. 1,18,375, which was not included in the suppressed turnover for the purpose of levying penalty. The Tribunal corrected the mistake and imposed a penalty on the estimated turnover of Rs. 1,18,375 at the minimum rate of 50 per cent under section 12(3) of the TNGST Act. The orders of the lower authorities were modified accordingly, and the tax revision case was ordered in the above terms with no orders as to cost.

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