9911796707
TMI Blog2001 (10) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... age 500 Supra, concerning the same assessee has held in the judgment dated September 14, 2001, that the sale of I.V. fluid in bottles is a composite sale and that the turnover relating to the bottles have to be, by virtue of the provisions contained in Section 3(7) of the Tamil Nadu General Sales Tax Act, 1959, treated as the turnover relating to the I.V. fluids itself and in those circumstances, the bottles will have to be regarded as having been disposed of in a manner which would attract the levy of purchase tax, the bottles having been purchased from unregistered dealers and no tax having been paid on that purchase either by the seller or by the buyer. While so holding, this Court followed the law laid down by the Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of bottles under Section 7-A. 5. The Supreme Court in the case of State of Madras v. Jayaraj Nadar & Sons after extracting Section 12(2) of the Tamil Nadu General Sales Tax Act, 1959 which remains in the same form even now, observed thus : "The question is whether penalty can be levied while making the assessment under Sub-section (2) of the above section merely because an incorrect return has been filed. The High Court was of the view that it is only if the assessment has to be made to the best of the judgment of the assessing authority that penalty can be levied. It seems to us that the High Court came to the correct conclusion because Sub-sections (2) and (3) have to be read together. Sub-section (2) empowers the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgment assessment made on an estimate and not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after April 1, 1996 an explanation has been added below Section 12(3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under Section 12(3). 8. The assessments for the assessment years 1993-94 and 1994-95 which were assessments made on the basis of the accounts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ona fide belief that the assessee had entertained having regard to the earlier judgments of this Court, and therefore, penalty levied was wholly unwarranted. The levy of penalty without considering the bona fides of the petitioner cannot be sustained. 11. We, therefore, set aside the order of the Tribunal to the extent it upholds levy of penalty for these years namely, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92 and 1992-93. The assessing authorities shall now hear the assessee with regard to the question of penalty in relation to assessment for these years and thereafter proceed to make appropriate orders in the light of what has been stated in this order, and in the light of the law otherwise applicable. The writ petitions are partly al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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