2009 (11) TMI 852 - HC - VAT and Sales Tax

Summary

Issues involved: Levy of penalty under section 12(3) of the Tamil Nadu General Sales Tax Act based on discrepancies in reported turnover and actual turnover.

Summary:
The judgment by the Madras High Court dealt with a revision against the Sales Tax Appellate Tribunal (STAT) confirming the penalty under section 12(3) of the Act. The assessee's turnover was assessed higher than reported due to unaccounted inter-State purchases of granite tiles. The assessing officer imposed a penalty under section 12(3) of the Act, which was upheld by the Appellate Assistant Commissioner (CT) and the STAT.

The main issue in this revision was the justification of the penalty under section 12(3) of the Act, considering the payment made by the petitioner via cheque before the completion of assessment. The petitioner argued that the penalty was unwarranted as the entire tax amount was paid by cheque before the order was passed, citing a relevant court decision.

The court examined the evidence presented, including the cheque dated January 7, 1998, and the bank statement confirming its encashment on January 10, 1998. Referring to a previous court decision, the court concluded that since the cheque was issued before the assessment order, the penalty under section 12(3) was not justified. The failure of the lower authorities to consider this payment led to the setting aside of their orders, and the revision was allowed with no costs incurred.