2009 (12) TMI 886 - HC - VAT and Sales Tax

Summary

Issues:
1. Penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 read with section 9(2A) of the Central Sales Tax Act, 1956.

Analysis:
The High Court of Madras, in the case at hand, dealt with a writ petition challenging the order of the Sales Tax Appellate Tribunal that restored a penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959, along with section 9(2A) of the Central Sales Tax Act, 1956. The court noted that the issue had been previously addressed by a Division Bench in the case of Appollo Saline Pharmaceuticals (P) Limited v. Commercial Tax Officer, wherein it was held that the penalty cannot be levied in cases where the assessment is made under section 12(1) of the TNGST Act. The court referred to the legislative intent and statutory provisions to determine that penalties should only be imposed in cases of best judgment assessments and not solely based on accounts furnished by the assessee. The court emphasized that penalties should not be levied for assessments made on the basis of accounts and not estimates, as penalties under section 12(3) are not applicable in such scenarios. Consequently, the court allowed the writ petition, setting aside the penalty imposed by the Tribunal, in line with the legal principles established in previous judgments. No costs were awarded in this matter.