2019 (12) TMI 466 - HC - VAT and Sales Tax

Imposition of penalty u/s 9(2A) of CST Act, 1956 - difference of tax was arrived at from the turnover which were available in the books of accounts - no concealment of turnover as such - HELD THAT - No question of law raises in the present tax case revision. The learned Tribunal has recorded the finding of the fact that the turnover in question is very much reflected in the books of accounts and there is no justification for imposition of penalty for concealment of turnover - The said facts as found do not give rise to any question of law. The tax case revision, filed by State, has no merit - Revision dismissed.

Summary

Issues:
1. Levy of penalty under Sec.12(3)(b) of the Tamil Nadu General Sales Tax Act 1959.
2. Interpretation of Explanation 1 to Sec.12(3)(b) of the Act.
3. Justification for imposition of penalty for concealment of turnover.
4. Question of law raised in the tax case revision.

Levy of Penalty under Sec.12(3)(b) of the Tamil Nadu General Sales Tax Act 1959:
The case involved a dispute regarding the imposition of a penalty under Sec.12(3)(b) of the Tamil Nadu General Sales Tax Act 1959. The Assessing Officer had levied a penalty based on the difference of tax due between the tax assessed and tax paid as per return for a particular assessment year. However, the Tribunal found that the turnover in question was available in the books of accounts and there was no specific concealment of turnover. Citing a relevant case law, the Tribunal held that penalties were attracted only for turnovers estimated due to specific concealment, and since the turnovers were available in the books of accounts, the penalty was not justified.

Interpretation of Explanation 1 to Sec.12(3)(b) of the Act:
The judgment discussed the interpretation of Explanation 1 to Sec.12(3)(b) of the Act, which specified the turnovers to be excluded for the purpose of penalty imposition. It highlighted that turnovers already available in the books of accounts should be excluded, and penalties were applicable only to turnovers estimated due to specific concealment. The case law referred to emphasized that penalties were not warranted when turnovers were readily available in the books of accounts and the assessment was based on these details.

Justification for Imposition of Penalty for Concealment of Turnover:
The Tribunal's decision emphasized that there was no justification for imposing a penalty for concealment of turnover in the case at hand. It was noted that the turnover in question was reflected in the books of accounts, and there was no evidence of specific concealment. The judgment reiterated that penalties under the Act were intended for cases where turnovers were estimated due to concealment, which was not the situation in this instance.

Question of Law Raised in the Tax Case Revision:
Upon considering the arguments presented, the Court concluded that no question of law arose in the tax case revision. The Tribunal's factual findings, which indicated that the turnover was available in the books of accounts and did not warrant a penalty for concealment, did not give rise to any legal issue. Consequently, the tax case revision filed by the State was deemed to lack merit and was dismissed without costs.

In conclusion, the judgment addressed the issues surrounding the imposition of penalties under the Tamil Nadu General Sales Tax Act 1959, focusing on the availability of turnovers in the books of accounts and the absence of specific concealment. It provided a detailed analysis of the legal principles governing penalty imposition and clarified the interpretation of relevant provisions, ultimately dismissing the tax case revision for lack of legal questions arising from the factual findings.