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TMI Blog1991 (10) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1959 (hereinafter referred to as "the Act") to the tune of Rs. 26,492 and a penalty of Rs. 5,559 at the rate of 50 per cent of the tax due on the suppressed turnover of Rs. 4,76,793.04. The explanation of the assessees regarding the penalty under section 22(2) of the Act was that they had remitted the collections to the department and that they would refund the surcharge to the consumers provided the department refunded the amount to the assessees. On the question of the penalty levied under section 12(5) of the Act to the tune of Rs. 5,559 the assessees admitted the omission to report the turnover of Rs. 4,76,793.04 in their returns and contended that there were certain bona fide disputes about the supplies made by the assessees and the same were regularised and sale invoice raised only on March 30, 1980. Both the explanations were rejected by the assessing authority and the penalties were imposed as proposed in the notice. On appeal, the Deputy Commissioner (CT) cancelled the penalty under section 22(2) of the Act on the ground that the collections had been paid over to the Government. The appellate authority however, confirmed the penalty levied under section 12(5) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the word "enhance" are more in the nature of obiter. This judgment was followed in Doveton Cafe v. State of Tamil Nadu [1981] 47 STC 345. While following the earlier judgment, the Division Bench in the later case relied more on the observations made in the nature of obiter and held that the Tribunal will have jurisdiction to entertain an enhancement petition only if there was something to be enhanced. They, however, observed as follows: ".........Enhancing the penalty already imposed is different from restoring the penalty which was imposed by the original authority but set aside by the Appellate Assistant Commissioner since the subject-matter of the appeal before the Tribunal was the order of the appellate authority and not that of the original authority." 3.. It is precisely to cover the lacuna in section 36(3) of the Act that the words "restore fully or partially as the case may be" were added by the Tamil Nadu Act 78 of 1986 with effect from January 1, 1987. Therefore the contention is that on the date of the order of the Tribunal on August 10, 1982, the words "restore fully or partially as the case may be" were not available and therefore the restoration of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in State of Tamil Nadu v. Kutty Flush Doors Furniture Co. (P.) Ltd. [1984] 57 STC 217 (Mad.). The Division Bench has taken the view that the power of the Tribunal to make an enhancement of assessment under section 36(3) of the Act is not subject to any condition, limitation or restriction, so long as the appeal relates to an order of assessment. In that case the enhancement petition was not filed at the first appellate stage but it was sought to be filed only at the time of second appellate stage and it was held that such an enhancement petition was maintainable. 5.. In State of Tamil Nadu v. Rallis India Limited [1984] 57 STC 218 (Mad.) the question was whether the State could file a petition for enhancement before the Tribunal in respect of a turnover, which was not in dispute before the Appellate Assistant Commissioner. Following several earlier judgments, the Division Bench held that the Tribunal could entertain enhancement petition even in respect of the turnover, which was not questioned by the assessee before the Appellate Assistant Commissioner. Again the same Division Bench in State of Tamil Nadu v. Periam Pillai Nadar Co. [1984] 57 STC 219 dealt with a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adu Sales Tax (Surcharge) Act, 1971, is legal and valid in view of the judgment of this Court in Deputy Commissioner (CT) v. M. Murugesan and Bros. [1985] 58 STC 143. Consequently it follows that the Tribunal was justified in allowing enhancement petition and giving direction to which we have already made reference. 8.. So far as the levy of penalty under section 12(5)(iii) of the Act, is concerned Mr. Inbarajan contends that the dispute relates to the supply made by the assessees was settled and the sale invoices were raised on March 30, 1980. Even at the time of check of accounts, the assessees had voluntarily made a statement of sales and paid the tax voluntarily. Therefore on the date of passing of the assessment order there was no tax to be paid by the assessees on the turnover of Rs. 4,76,793.04, which had been omitted to be shown in the returns. Inasmuch as before the assessment order was finalised on January 31, 1981, the turnover had been disclosed and the tax paid voluntarily there was no case for levying penalty under section 12(5)(iii) of the Act. Reliance is placed on the judgment of a single Judge of the Court in Kalyani Agencies v. State of Tamil Nadu [1984] 10 STL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the turnover of Rs. 4,76,793.04 was disclosed. But at the time of the check of accounts in pursuance of a notice dated October 22, 1980 statements were filed by the assessees and in one of those statements the said turnover of Rs. 4,76,793.04 had been disclosed. But there is absolutely no indication as to the date on which the tax on this turnover was paid by the assessee. Even so we are satisfied that the assessees have made good the ground that in pursuance of a notice calling for documents he had disclosed the accounts in October, 1980. The fact that the tax on this amount had also been paid is not disputed, but the date of payment is not available. Therefore even before the pre-assessment notice issued on December 23, 1980, the assessee had filed a revised statement and as per the revised statement no suppression could be inferred. Consequently following the judgments quoted above we hold that the penalty under section 12(5)(iii) of the Act cannot be justified. 8.. The revision is accepted in part and the penalty of Rs. 5,559 imposed for the suppression of the turnover of Rs. 4,76,793.04 is deleted. The penalty under section 22(2) of the Act, to the extent of Rs. 20,492 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal by the representative of the Revenue. The proviso to the section gives powers to the Tribunal to admit an enhancement petition, etc., presented after the expiration of the aforesaid period if it is satisfied that the assessing authority or his representative had sufficient cause for not filing such petition within the said period. This section, therefore, prescribes the period of limitation for the filing of an enhancement petition by the representative appearing for the Revenue before the Tribunal. The section, in terms, does not deal with the powers of the Tribunal to pass an order of enhancement. That power is vested in the Appellate Tribunal under section 36(3)(a)(i) of the Act. The provision reads thus: "36(3) In disposing of an appeal, the Appellate Tribunal may, after giving the appellant a reasonable opportunity of being heard, and for sufficient reasons to be recorded in writing- (a) in the case of an order of assessment- (i) confirm, reduce, enhance or annul the assessment or penalty or both;" By the above section, in an appeal preferred by the assessee, the Tribunal has the power to decide the appeal by either confirming, reducing or even enhanci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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