1995 (4) TMI 282 - HC - VAT and Sales Tax

Summary

Issues:
1. Levy of penalty under section 12(5) of the Tamil Nadu Sales Tax Act, 1959 for non-disclosure of taxable turnover in monthly returns.
2. Whether penalty is exigible when turnover is not disclosed in the return.
3. Bona fide reasons for non-disclosure of turnover and filing a revised statement before completion of assessment.

Detailed Analysis:
1. The State initiated separate penalty proceedings against an assessee, a dealer in grams, for failing to disclose taxable turnover of Rs. 2,30,688 in the monthly returns for the assessment year 1980-81. The assessing officer levied a penalty under section 9(2-A) of the Central Sales Tax Act, 1956 read with section 12(5) of the Act, 1959. The Appellate Assistant Commissioner confirmed the penalty, but the Tribunal deleted it, citing the assessee's disclosure of turnover before the assessment was completed.

2. The State contended that penalty under section 12(5) of the Act, 1959 is applicable once turnover is omitted in the return, regardless of any bona fide reasons. The State argued that the Tribunal erred in deleting the penalty, emphasizing that non-disclosure alone warrants penalty imposition. The State referred to a pending case before the Court for a similar issue (T.C.1414 of 1982) to support its stance.

3. The assessee explained that the non-disclosure was due to doubts regarding the nature of the sale to Calcutta buyers. The assessee sent goods for sale on consignment and outright sale, with representation in Calcutta handling transactions. The Tribunal accepted the assessee's explanation, noting that the turnover was disclosed before assessment completion, indicating bona fide intent. The Tribunal held that penalty is not exigible when a revised statement is filed before assessment completion, as per rule 5-A of the Act. The Court upheld the Tribunal's decision, emphasizing the bona fide nature of the assessee's actions and the timely disclosure of turnover.

In conclusion, the Court dismissed the revision petition, affirming the Tribunal's decision to cancel the penalty, as the assessee's actions were deemed bona fide, and the turnover was disclosed before the assessment was finalized.