9911796707
TMI Blog2009 (6) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in Ramco Cement Distribution Co. Pvt. Ltd. v. State of Tamil Nadu [1992 (10) TMI 228 - SUPREME COURT OF INDIA]. As held in the decision of this court reported in Appollo Saline Pharmaceuticals (P) Ltd. v. Commercial Tax Officer (FAC) [supra], under section 12(4) specific expression used is "may " for the purpose of levying of penalty. We are convinced that the order of the Tribunal in having set aside that part of the order of the Assistant Commercial Tax Officer in having imposed penalty was justified and the same was perfectly in order. We therefore answer the question of law against the appellant and in favour of the assessee - Tax Case No. 28 of 2009 - - - Dated:- 18-6-2009 - F. M. Ibrahim Kalifulla And B. Rajendran,JJ. For the Petitioner : Mr. Haja Nazaruddin Spl. G. P. (Taxes) For the Respondent : Mr. N. Inbarajan ORDER (Order of the Court was made by F. M. Ibrahim Kalifulla, J.) This Revision by the State arised on the following substantial question of law, viz., "Whether in the facts and circumstances of the case, the Tribunal is legally correct in having deleted the penalty levied under Section 12(5)(iii) of the Tamil Nadu General Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1982) 51 STC 171 (Ramco Cement Distribution Co.(P.) Ltd. Vs. The State of Tamil Nadu), which came to be reversed by the Hon'ble Supreme Court only in the decision reported in (1993) 88 STC 151 (Ramco Cement Distribution Co.(P.) Ltd. Vs. The State of Tamil Nadu). 6. We heard Mr.Haja Nazaruddin, learned Special Government Pleader (Taxes) appearing for the appellant and Mr.N.Inbarajan, learned counsel appearing for the respondent. 7. We are also convinced with the reasoning of the Tribunal while interfering with the levy of penalty. The imposition of penalty is prescribed under Section 12 (4) and (5) of the Act. While under Section 12(4), the circumstances in which penalty can be imposed is stipulated, under Section 12(5) the power to impose the penalty and the quantum of penalty that can be imposed is specified. Section 12(4) and (5) needs extraction which reads as under: "Section 12 (4): Notwithstanding anything contained in sub-section (1), (2) and (3), the assessing authority may, if it is satisfied that the accounts maintained by a dealer are correct, assess such dealer on the basis of such accounts, if such dealer has:- (i) failed to submit the prescribed return; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reported in (1982) 51 STC 171 (Ramco Cement Distribution Co.(P.) Ltd. Vs. The State of Tamil Nadu), it will have to held that the stand of the petitioner was not without any substance. In the said decision, these very components viz., freight charges and packing charges whether can be allowed as taxable component was specifically dealt with and the Division Bench has held as under at page 190: "The learned counsel for the department cited a Bench decision of this Court in State of Tamil Nadu Vs. Chettinad Cement Corporation Ltd. (1976) 38 STC 519 in support of his contention that freight could not be exempted from sale price for the purpose of sales tax under the T.N.G.S.T. Act and the Rules made thereunder. We are afraid that this decision cannot be accepted as a binding authority on the proposition of law that we are now called upon to decide. We are in agreement with the learned Judges when they say that freight will have to be included in the total turnover under the T.N.G.S.T. Act. However, by virtue of the operation of rule 6(c) freight will have to be excluded. No doubt, rule 6(c)(i) states that freight when specified and charged for by the dealer separately without incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile to refer to the decision reported in (2002) 125 STC 505 (Appollo Saline Pharmaceuticals (P) Ltd. Vs. Commercial Tax Officer (FAC) and Others, wherein this Court while construing Section 12(4) of the Act has taken the view that in the light of the specific expression viz., "may" used in the said section, the levy of penalty being discretionary, such discretion is required to be exercised having regard to all the circumstances of the case including the bona fides of the assessee. The Division Bench has held as under in paragraph 3 and 9 : "3..... In so far as the assessments made under section 12(1) between December 3, 1979 to May 27, 1993, the levy of penalty being discretionary having regard to the use of the word "may" in section 12(4), that discretion is required to be exercised having regard to all the circumstances of the case including the bona fides of the assessee. * * * 9. The assessing authorities have not applied their mind as to whether in respect of those assessments to which section 12(4) and 12(5) which have since been deleted, would apply, the assessee had failed to disclose any bona fides for not having paid the tax earlier. It is the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es tax authorities imposing and upholding levy of penalty are set aside. Only to that extent the appellants succeed and their appeals are allowed. The judgment of the High Court in respect to the planting subsidy and transport subsidy is upheld. In the facts and circumstances of the case, there shall be no order as to costs." (Emphasis added) 13. Reading of the above decision of this Court as well as that of the Hon'ble Supreme Court and applying the principles set out therein, to the facts of this case, it will have to be held that the conduct of the respondent assessee in not including the freight charges and packing charges in the taxable turnover cannot be held to be a deliberate or intentional act on its part with a view to defeat its tax liability. On the other hand, the submission of the return of the respondent assessee during the relevant year was fully supported by the Division Bench decision of this Court which held the field till the year 1992 when it came to be reversed in the decision of the Hon'ble Supreme Court in (1993) 88 STC 151 (Ramco Cement Distribution Co.(P.) Ltd. Vs. The State of Tamil Nadu). As held in the decision of this Court reported in (2002) 125 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
