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TMI Blog1976 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... n the file of Deputy Commercial Tax Officer, Nannilam for the assessment year under dispute. The assessment record reveals that they sent returns monthly along with payment of the taxes due. They returned a total turnover of Rs. 8,49,377-20 and an assessable turnover of Rs. 8,07,193-70 for the assessment year under dispute. The Assessing Officer scrutinised the relative accounts and determined the assessable turnover at Rs. 23,19,312-92 after due notice and opportunity. In making this estimated assessment he added a sum of Rs. 5,10,614-70 to cover the suppressions at the head office and Rs. 2,08,882 to cover the omissions at the branch office. He also levied a penalty of Rs. 19,148 on the basis of the involved suppressions. (ii) The Appellate Assistant Commissioner while disposing of the initial appeal preferred before him under s. 31 of the Tamil Nadu General Sales Tax Act adopted a different manner of computation of turnover. While the Assessing officer proceeded from the basic aspect that the receipts of collections according to the accounts for Rs. 31,90,801-32, represented the book turnover, the Appellate Assistant Commissioner adopted the value for Rs. 58,465 parcels as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Assistant commissioner are resultantly found to be proper and the counts of dispute as indicated in the body of the appeal memorandum are found to be in order. 5. The State Representative preferred a petition for enhancement under s. 36. This was filed on 26th June, 1973 itself. It referred to the erroneous adoption of estimated figures to compute the sales turnover if circulation scheme, against the adoption of the actuals by the Assessing Officer. It also contradicted the basis for the reduction in the estimated addition for suppressions. The last contest was in regard to the reduction in the quantum of penalty. The petition sought for the restoration of the position adopted by the assessing authority. The counter was filed on 6th Sep, 1973, itself. We heard both the sides in regard to this enhancement petition also. 6. Four specific counts emerge for our consideration in this instant appeal: (i) Scope for liability of circulation sales on a turnover of Rs. 20,45,275. (ii) Dispute in regard to the sustained suppressions of Rs. 1,70,584.70 and Rs. 1,69,745.56. (iii) penalty levy of Rs. 8,507. (iv) Enhancement petition. Claim for Rs. 20,45,275. 7. The course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions of the scheme read as follows: (5) Any person sending M.O. or bank drafts for Rs. 45 along with coupon duly filled up will receive the article that is mentioned in the coupon together with three sets of (9) coupons. (6) Coupons should be returned duly filled within three months of their receipt. Coupons received after three months will not be attended to." Thus the basic facts pertaining to the circulation scheme presently before us and that decided by the Lordships of the Madras High Court are found to be almost identical. 9. The Lordships of the Madras High Court in the decision rendered by them in 1976 CTR (Mad.) 445 referred to the definition of "sale" and "agreement to sell" in s. 4 of Sale of Goods Act. They also considered the views of the Supreme Court in State of Madras vs. Ganon Denkerly Co., (2) in regard to the constituent elements of valid sale and the implications of agreement to sell. They also explicitly extracted the portions of the decision of the Supreme Court in New India Sugar Mills Ltd. vs. Commissioner of Sales Tax, Bihar (3) bringing out the elements of valid sale etc. They outlined that these decisions indicated "that among other cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... people and making them members by honouring the V.P.Ls., sent to them. Certainly, the consideration which proceeded from A which enabled him to get the article was not merely the money paid or promised, but something more. It could not also be said that the title in the goods passed to A under any contract of sale between him and the Company. In the passage extracted from the Supreme Court s judgments, it would be seen that if the consideration was not money, it would not be a sale at all. In distinguishing a sale from barter or exchange, we find the following passage in Benjamin on Sales (1974 Edition) page 24: To constitute a sale it is necessary that the consideration for the transfer of the property in the goods should be in money. This may be either paid or promised i.e., the sale may be for cash or on credit) but if the consideration is something other than money the construct is not, strictly speaking, one of sale in English law. Where goods are given or promised in exchange for goods, the transaction is a barter or exchange. Similarly, goods may be given in consideration for work done, or for rent, or for board and lodging, or in return for the extinction of a right or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to fix the involved turnover at Rs. 1,70,584.70 would naturally be proper. (ii) The correctness of the figures adopted in Schedules III and IV are not in dispute. They are therefore held to be the actual quantum of sales by the appellants. (iii) At the stage of assessment the appellants contended that the business conducted by Thirunavukkarasu at Mayuram factually belongs to the appellants only. It was therefore represented that the inflow and outflow of goods between the appellants and Thirunavukkarasu should be treated as branch transfers and not as sales. (iv) We also find that Thirunavukkarasu invoked the provisions of Art. 226 of the Constitution by way of a petition before the High Court of Madras. The allegation made in the petition was that the business at Mayuram actually belonged to his wife. Reference is also made to letters written by the petitioner and his wife, i.e. appellants to such an effect. The Lordships opined that there was no wrongful exercise of power by the authorities and dismissed the petition. The following portion in the decision rendered by the Lordships present a factual appraisal and is extracted below: "But the principal facts, upon which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to circulation business which is now not liable to assessment. We feel that these may be possibilities, but we also feel that in the absence of correlated records, the allowance made by the Appellate Asst. Commissioner by way of deduction of Rs. 1,70,584.70 sufficiently covers all possible pleas such as mergers, overlappings, returns etc. Return of goods to Thirunavukkarasu not established by documents is presented as a natural probability. We therefore feel that both the counts of addition cover estimate of taxable turnover after making reasonable allowances for returns, merger under circulation sales, other possible pleas etc. We accordingly confirm both these counts of estimated additions of turnover to the taxable turnover of the appellants. 15. Penalty levy Rs. 8,507: (i) the suppressed turnover was determined at Rs. 3,40,330.65 as outlined above. The actual tax due on this turnover was computed at Rs. 8,507. The first appellate authority fixed the quantum of penalty as equal to tax and refixed the penalty at Rs. 8,507. (ii) Basically we find that but for the surprise inspection conducted by the Officers of the Department the existence of these omitted dealings would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merit our consideration. Due to lack of correlated records and proofs the appellants could not establish their claims for returns, possibilities of merger, apportionment to circulation sales etc. Taking into consideration all these features we fix the penalty at half the tax involved. We accordingly reduce and refix the penalty at Rs. 4,254. 16. ENHANCEMENT PETITION: (i) In regard to the enhancement petition, we find that it deals with statistical differences and contain a plea to revise the quantum of suppressions and penalty to the level adopted by the assessing authority. (ii) We have outlined in paras 2 4 how the statistical differences in figures arose. We have adopted correct figures as adopted by the Appellate Asst. Commissioner on verification of the related records. Even otherwise the figures of variation relate to circulation sales which are deleted from the scope of assessment. (iii) We have considered in paras 12 to 14 the details pertaining to the suppressions and the related addition. The possible features of sales returns, apportionment possibility to circulation sales, scope for mergers etc. sufficiently merit confirmation of the quantum adopted by the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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