9911796707
TMI Blog2009 (12) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 - - - Dated:- 10-12-2009 - RAVIRAJA PANDIAN K. AND SUNDRESH M.M. , JJ. ORDER:- The order of the court was made by K. RAVIRAJA PANDIAN J. By formulating the following substantial questions of law: (i) Whether the order of the Tribunal cancelling the levy of penalty under section 22(2) and thereby allowing the appeal of the assessee and dismissing the enhancement petition of the Department is erroneous in law? (ii) Whether the Tribunal ought to have seen that in case of section 22, the levy of penalty follows as a matter of course wherever the assessee is found to have collected tax in contravention of the provisions of the Act and as held in State of Tamil Nadu v. Selvakumar Timber Traders [1984] 57 STC 69 (Mad) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is quantified to Rs. 10,421. Before the Tribunal, the assessee filed an appeal. In turn, the Department filed an enhancement petition to restore the penalty imposed by the assessing officer. The Tribunal, after hearing the appeal and enhancement petition, found that there was no illegal retention of the amount by the assessee and that the collection of the tax at the rate of 15 per cent was paid over to the Government. On the abovesaid reasoning, the Tribunal has come to the conclusion that the penalty is unwarranted under section 22(2) of the Act. By holding so, the Tribunal dismissed the enhancement petition filed by the Department. As the relief has been granted in favour of the assessee, the Department is on further revision before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of each case. In the facts of the present case, the electronic goods were taxable at the rate of 15 per cent till March 17, 1986. On and from March 17, 1986, the rate of tax has been reduced to 10 per cent. It is the case of the assessee that without being aware of the fact that the rate of tax has been reduced to 10 per cent from March 17, 1986, they had collected the tax at old rate. However, they did not retain even a single pie with them and the entire amount so collected at the rate of 15 per cent has been paid over to the coffer of the Government. There is absolutely no intention on the part of the assessee to collect tax in contravention of section 22(1) of the Act and retain the same for the benefit of the assessee. A Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in R.S. Joshi, Sales Tax Officer v. Ajit Mills Limited reported in [1977] 40 STC 497 had an occasion to consider the import of the expression 'collected' by reference to sections 37(1)(a) and 46(2) of the Bombay Sales Tax Act. Section 37(1)(a) of the Bombay Sales Tax Act reads as follows: '37(1)(a). If any person, not being a dealer liable to pay tax under this Act, collects any sum by way of tax, or being a registered dealer collects any amount by way of tax in excess of the tax payable by him, or otherwise collects tax in contravention of the provisions of section 46, he shall be liable to pay, in addition to any tax for which he may be liable, a penalty as follows: (i) Where there has been a contraventio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the use of the word 'shall', the court held that the expression 'collected' must have reference to 'collected illegally and retained' or 'collected and kept as his', to attract the penalty of forfeiture. Thus, the circumstances under which the tax was 'received' have to be considered by the authorities before imposing the penalty. If so construed from the facts noticed supra, it could be seen that all that the assessee has done in this case was that they collected tax at the rate of 15 per cent as per the original rate without being aware of the reduction of tax at the rate of 10 per cent. The tax so collected was duly remitted to the Government. No amount was retained by the assessee, which fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. State of Tamil Nadu [1984] 57 STC 72 (Mad). Similar view has been taken by this court in the case of State of Tamil Nadu v. Sasman and Company reported in [1984] 57 STC 160 and in the case of State of Tamil Nadu v. Jaya Pharmacy reported in [1984] 57 STC 164 (Mad). The above judgments show that depending upon the facts and circumstances of the case, it is a matter for discretion of the assessing officer to determine as to whether the penalty provision under section 22(2) of the Act is attracted in a case where collection has been made in violation of section 22(1) of the Act and that the imposition of penalty is not warranted. The discretion, indeed, has to be exercised judiciously, properly and bonafidely. In the given set of facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
