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2013 (6) TMI 697 - HC - VAT and Sales Tax
Issues involved: The judgment involves the confirmation of penalty under section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 on the purchase turnover under section 7A and on the turnover under section 3(4) of the Act. The main question of law is whether the Sales Tax Appellate Tribunal erred in confirming the levy of penalty when there was no material to conclude that the turnover was not reflected in the books of accounts.
Summary: The tax case revision was filed by the assessee against the Sales Tax Appellate Tribunal's order for the assessment year 1997-98. The assessment was a reassessment where the purchase turnover of Myrobalan nuts and the turnover from exported garments were brought to tax at four percent. Penalty was proposed and levied for the failure to report the turnover, without a proper discussion on the levy of penalty as required under section 16(2) of the Act. The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal confirmed the penalty based on the inspection noting the turnover, leading to the assessee's appeal before the High Court. The counsel for the assessee relied on a previous court decision to argue that penalty under section 16(2) should only be levied for wilful non-disclosure of assessable turnover. Since there was no clear finding of wilful non-disclosure in the assessment order, the High Court held that the penalty could not be justified. Referring to the previous court's decision, the High Court emphasized the necessity of a deliberate intention to suppress assessable turnover for the levy of penalty under section 16. Therefore, the High Court set aside the Tribunal's order and canceled the levy of penalty, ruling in favor of the assessee in the tax case revision for the assessment year 1997-98.
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