2011 (10) TMI 548 - HC - VAT and Sales Tax

Penalty under section 12(3)(b) - Whether in the facts and circumstances of the case the Tribunal is right in deleting the penalty imposed under section 12(3)(b) as additional sales tax components - Held that - The power to impose penalty in the light of the said provision has been admittedly given only from the year 1997. On the facts of the present case the assessment relates to 1995-96. The said issue has been covered by the judgment of this court in Eastern Electrics v. State of Tamil Nadu and Chakrapani Oil & Rice Mills v. State of Tamil Nadu 2008 (12) TMI 679 - MADRAS HIGH COURT in favour of the assessee holding that in respect of the period before 1997 there is no power to impose penalty - Decided against Revenue.

Summary

Issues:
Imposition of penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 in relation to dues under the Tamil Nadu Additional Sales Tax Act, 1970.

Analysis:
The High Court of Madras dealt with the issue of imposing a penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 concerning dues under the Tamil Nadu Additional Sales Tax Act, 1970. The court noted that the power to impose such penalty was granted only from the year 1997 onwards. In the case under consideration, the assessment pertained to the year 1995-96. Referring to previous judgments, the court highlighted that there was no power to impose penalties for periods before 1997. The court cited the judgments in Eastern Electrics v. State of Tamil Nadu and Chakrapani Oil & Rice Mills v. State of Tamil Nadu, which supported the view that penalties could not be levied without a charging section in the relevant legislation. The court emphasized that the absence of a substantive provision for penalty in the Additional Sales Tax Act meant that penalties could not be automatically imposed based on provisions from the General Sales Tax Act. The court dismissed the tax case revision and ruled in favor of the assessee, concluding that the levy of penalty could not be sustained without a specific charging section in the relevant legislation.

In conclusion, the judgment by the High Court of Madras clarified the limitations on imposing penalties under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 for dues under the Tamil Nadu Additional Sales Tax Act, 1970. The court emphasized that penalties could only be imposed from 1997 onwards and that there must be a specific charging provision in the legislation to support the levy of penalties. The court's decision was based on previous judgments and legal principles, ultimately ruling in favor of the assessee and dismissing the tax case revision.