2003 (11) TMI 571 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Levy of purchase tax under section 7-A(1)(c) of the Tamil Nadu General Sales Tax Act, 1959.
2. Imposition of penalty under section 16(2) read with section 12(3) of the Tamil Nadu General Sales Tax Act, 1959.

Issue-wise Detailed Analysis:

1. Levy of Purchase Tax under Section 7-A(1)(c):
The petitioner contested the revised assessment orders for the years 1998-99, 1999-2000, and 2000-2001, which levied purchase tax on the purchase turnover of vegetable oil. The petitioner argued that the vegetable oil was purchased from registered dealers within Tamil Nadu, who were exempt from sales tax due to government notifications. These purchases were stock-transferred to branches outside Tamil Nadu. The petitioner contended that since the first sale was exempt from tax, the goods should not be taxable under section 7-A(1)(c).

The respondent argued that the exemption was conditional, applicable only up to a turnover of Rs. 300 crores, and since the purchases were made under circumstances where no tax was payable under sections 3 or 4, section 7-A(1)(c) was applicable. The Tribunal upheld the levy of purchase tax for the years 1999-2000 and 2000-2001, stating that the goods retained their taxable nature beyond the exemption limit and were still considered taxable goods under the Act. However, for the year 1998-99, the Tribunal set aside the levy of purchase tax, noting that there was a total exemption without any turnover limit before April 1, 1999.

2. Imposition of Penalty under Section 16(2) read with Section 12(3):
The petitioner challenged the imposition of penalties, arguing that there was no wilful non-disclosure or suppression of turnover. The respondent initially levied penalties for wilful non-disclosure of taxable turnover under section 7-A(1)(c). However, the Tribunal found that all relevant facts and figures were already before the authorities during the original assessment, and the petitioner was granted exemptions based on government notifications. The Tribunal concluded that there was no wilful suppression, which is essential for imposing penalties under section 16(2). Consequently, the penalties were deleted for all the years in question.

Conclusion:
The Tribunal set aside the revised assessment order for the year 1998-99, allowing the petition in O.P. No. 692 of 2003. For the years 1999-2000 and 2000-2001, the Tribunal upheld the levy of purchase tax but set aside the penalties, dismissing the petitions in O.P. Nos. 693 and 694 of 2003 concerning the tax portion. The miscellaneous petitions related to these original petitions were also dismissed.