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TMI Blog2014 (2) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... he customer - Tamil Nadu State was the only State competent to levy Sales Tax. - Decided against the assessee. Whether the assessment is best judgement assessment or not - Held that:- The mere fact that the turnover were culled out from the books of accounts by itself does not mean the assessment is not a best of judgment assessment. The material based on which the best of judgment thus made being the account books, we do not find any justifiable grounds to accept the plea of the assessee that the assessment is one based on books and hence not the best of judgment assessment. - Decided against the assessee. Levy of penalty - Held that:- he transaction is a of local sale, in the background of the admitted fact that the order placed by customers were for supply of sacks of specified description, we hold that the facts herein certainly attract the provisions under Section 12(3) of the Central Sales Tax Act - however taking lenient view instead of the maximum penalty, the levy of penalty at 50% imposed. - Tax Case (Appeal) Nos. 1955 to 1964 of 2008 - - - Dated:- 27-11-2013 - Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Petitioner : Mr. N. Inbarajan For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the fabrics for lamination purposes and the said concern placed orders by Pearl Sacks Pvt., Limited, Pondicherry. After the job work was done, the said M/s.Satya Laminates sent the laminated fabrics to the stitching units at M/s.Poly Prist, Chennai for stitching and printing purposes. The finished products namely, laminated H.D.P.E. Sacks were delivered or supplied to various buyers as per the instructions of the assessee at Chennai and despatched to various destinations of the parties outside the State. 4. It is stated that the assessee is an unregistered dealer. Contending that the transactions were not assessable under the provisions of the Tamil Nadu General Sales Tax Act and that the appropriation had taken place at Pondicherry itself, the assessee filed its objections to the proposal made by the Assessing Officer under the Tamil Nadu General Sales Tax Act. While making proposal for determining the taxable turnover on the best of judgment assessment basis, penalty was also proposed to be levied under the provisions of the Tamil Nadu General Sales Tax. The assessee did not dispute the fact as regards the manufacturing activity done at Pondicherry as well as on the orders r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he First Appellate Authority accepted the arguments of the assessee and thus, set aside the order of assessment. 8. Finding the order as prejudicial to the interest of the Revenue, the Joint Commissioner issued suo-moto revisional proceedings under Section 34 of the Tamil Nadu General Sales Tax Act, taking the view that even though the orders were placed at Pondicherry office and the factory at Pondicherry, yet the registered office being at Chennai, and the branch office orders could only be treated as the orders placed with the head office only, as per the decision M/s.Sahney Steel and Press Works Ltd., Anr., vs. Commercial Tax Officer Ors., reported in 60 STC 301(SC). Further, the Revisional Authority viewed that the entire orders were not placed at Pondicherry office and some orders were placed at Registered office at Chennai; He further viewed that the Pondicherry factory had only despatched HDPE Woven fabric at Chennai; the stitching of HDPE Woven fabrics as per the orders placed by the parties, were done only at Chennai. The delivery challan for the finished HDPE sacks were prepared by the stitching unit for consigning the same through the various parties. Thus, viewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue. Referring to the orders placed by the assessee's customers, he submitted that going by the technical specification, every H.D.P.E., fabric sent, is earmarked for a particular customer for the specific purpose of making sacks for packing urea, textiles, fertilizers, chemicals as the case may be. He pointed out the specifications were different, the strength of the brand were also different. Thus, the question of diverting one material to another was almost impossible and the mere aspect of stitching and lamination would not change the quality and specification of fabrics ordered by the customers. Consequently, the view of the Joint Commissioner was totally erroneous. 11. We do not agree with the said submissions made by the learned counsel for the assessee. It is not denied by the assessee herein that the orders placed by the parties were for stitched sacks with the logo imprinted thereon. On this sole aspect itself, the assessee's case merits to be rejected by us. It is no doubt true that the H.D.P.E., fabrics itself was manufactured at Pondicherry, and as already pointed out when the agreement is not for just the fabric, but for sale of sacks of the spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee that it was an unregistered dealer throughout the period under consideration. Consequently, there was no filing of return disclosing the turnover assessable under the provisions of the Central Sales Tax Act. It is not denied by the assessee that it had received orders from its branch office outside the State as well as in its office at Tamil Nadu, where the registered office is located. Leaving aside for the movement that the order placed in the branch officer is an order on the Head office, the fact remains that even for claiming exemption under the provisions of the Act that the transactions are inter-State sale, the assessee ought to have registered itself under the provisions of the Act. The assessment itself was made only based on the information gathered by the department, but for this, the entire transaction would have gone outside the assessment. In the background of this fact, the question of levy of penalty in this case assumes significance. 14. Learned counsel appearing for the assessee submitted that the entire assessment rested on the turnover available in the books of accounts. Consequently, the question of levy of penalty in this case did not ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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