2013 (7) TMI 350 - HC - VAT and Sales Tax

Penalty under TNGST Act - Tribunal confirmed penalty - Held that - in the absence of specific provision under the Additional Sales Tax and the Surcharge Act during 1996-97, the corresponding levy of penalty on the additional sales tax and surcharge liability would not arise. The levy of penalty under Additional Sales Tax Act itself was introduced only under Act 31 of 1996 with effect from 16.04.1996 - Assessing Officer shall redo the assessment and the corresponding demand on surcharge and additional sales tax - Decided in favour of Assessee.

Summary

Issues:
1. Proper understanding of findings by the Appellate Tribunal regarding estimation of groundnut kernel purchase and consequential oil and oil cake output.
2. Correctness of the Appellate Tribunal's conclusion on the availability of the word "Kjy;" in the dealer's copy and department's copy.
3. Restoration of penalty by the Appellate Tribunal in the absence of corroborating evidence.

Analysis:
1. The assessment year 1996-97 involved a dealer in groundnut kernel and oil cake whose business place was studied on 25.06.1996 by the Assessing Officer. Discrepancies in the opening stock led to an estimation of purchases and sales for assessment. The First Appellate Authority overturned this estimation due to discrepancies in the recorded statement and lack of consideration for the actual situation, deleting the estimation and setting aside the Assessing Officer's order.

2. The Revenue appealed this decision to the Sales Tax Appellate Tribunal, which disagreed with the First Appellate Authority's conclusion. The Tribunal found no evidence of interpolation of the word "Kjy;" in the dealer's copy, indicating that the word was not inserted after inspection. Consequently, the Tribunal reinstated the assessment and penalty, based on the available material and the absence of interpolation.

3. Despite arguments in favor of the Appellate Assistant Commissioner's order, the High Court upheld the Tribunal's decision, finding no reason to disturb the factual findings. However, regarding the penalty, the High Court agreed with the petitioner that the penalty under the Additional Sales Tax and Surcharge Act for 1996-97 was not justified due to the absence of specific provisions during that period. The Court directed the Assessing Officer to reevaluate the assessment without the additional sales tax and surcharge penalty.

In conclusion, the Tax Case Revision was disposed of with no costs, maintaining the assessment but excluding the penalty related to additional sales tax and surcharge due to the lack of legal basis during the relevant period.