1998 (1) TMI 508 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of turnover for exemption claim under Central Sales Tax Act, 1956.
Levy of penalty for incorrect and incomplete return submission.

Assessment of turnover for exemption claim under Central Sales Tax Act, 1956:
The case involved an assessee claiming exemption on a turnover of Rs. 2,59,135 for sales of reading books under item No. 22 of the Schedule to the notification. The assessing officer did not accept the claim, stating that the assessee did not actually sell reading books but only printed materials for publishers. The Appellate Assistant Commissioner upheld this decision. The Tribunal, however, allowed the appeal, leading to the current case. The High Court analyzed the facts and determined that the turnover claimed by the assessee did not represent sales of reading books as required for exemption under item No. 22. The Court found that the Tribunal had erred in its conclusion and set aside the assessment, restoring the Assessing Officer's order.

Levy of penalty for incorrect and incomplete return submission:
The assessing officer imposed a penalty of Rs. 38,871 for submitting an incorrect and incomplete return. The penalty was based on the difference in tax payable on the turnover disclosed in the return and that determined by the assessing authority. The High Court noted that the assessee had disclosed all transactions but incorrectly claimed exemption for a portion of the turnover as sales of reading books. The Court determined that this did not amount to refracting or violating the relevant provisions, as required for imposing the penalty. Therefore, the Court upheld the Tribunal's decision to set aside the penalty, disagreeing with the reasoning provided by the Tribunal but confirming the decision based on different legal grounds. The High Court partially allowed the revision by setting aside the assessment on the turnover claimed for exemption and dismissing the revision in other respects.