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TMI Blog2008 (11) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 7A of the TNGST Act when there was no proof to show that gold jewellery brought from other States were manufactured out of the worn-out jewellery obtained from undisclosed sources? Whether the Appellate Tribunal is correct in sustaining the levy of penalty under section 12(3)(b) of the TNGST Act in the absence of a best of judgment assessment? Held that:- The very documents were produced by the assessee before the assessing authority as well as before the Appellate Assistant Commissioner as is evident from the averments in the respective orders of the assessing authority as well as appellate authority. The said fact is also found from the grounds of appeal filed by the Department before the Tribunal wherein they have clearly admitted about the receipt of the jewellery on March 17, 1998. In such circumstances, we are of the considered view that the Tribunal was not justified in setting aside the finding with regard to suppression of turnover. Accordingly, the substantial questions of law Nos. 1 and 2 are decided in favour of the assessee and against the Department. As it was evident that the assessee was liable for purchase suppression and as such the assessing authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how that gold jewellery brought from other States were manufactured out of the worn-out jewellery obtained from undisclosed sources? (5) Whether the Appellate Tribunal is correct in sustaining the levy of penalty under section 12(3)(b) of the TNGST Act in the absence of a best of judgment assessment? The factual matrix necessary for the disposal of the tax case are as under: The petitioner is a dealer in gold and silver jewellery and is an assessee on the file of the Commercial Tax Officer, Sowcarpet. For the assessment year 1996-97 the dealers have reported a total and taxable turnover of Rs 2,13,21,003 and Rs.1,96,58,099, respectively in form A1 returns. The dealers have claimed exemption on second sale of gold jewellery, second sale of diamonds as well as sale of ready-made thali made of gold, not exceeding eight grams in weight inclusive of all attachments but without chain. While so, the place of business of the assessee was searched by the officers of the Revenue Intelligence, Income-tax Department, Chennai on January 30, 1997. In the said search, 16.428 kgs. of gold jewellery were seized from the business premises of the dealer representing excess jewellery. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also shown in the accounts for the assessment year 1997-98 and tax was also paid accordingly and as such the very basis for determining the sales turnover treating it as sales suppression by the assessing officer was unjustified. The assessee also attempted to explain the possession of 16.428 kgs. of gold jewellery as according to the assessee the same was handed over only by the dealers of Nellore by way of approval. The case of the assessee with regard to the receipt of the gold jewellery on March 17, 1998 as well as the accounting of those jewellery during the year 1997-98 were considered by the Appellate Assistant Commissioner and taking into account, the fact that the jewellery was returned only on March 17, 1998 and as such there was no possibility of effecting sales during the assessment year in question, the Appellate Assistant Commissioner set aside the finding with regard to sales suppression. With regard to the purchase omission, the Appellate Assistant Commissioner considered the statement given by the jewellers who have supplied the goods in question by way of approval, but however observed that, half of the excess noticed in the place of business would be reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments on March 17, 1998. There was no challenge made by the Department at any point of time that the gold was returned only during the assessment year in question. Therefore the Tribunal was not justified in setting aside the finding of the Appellate Assistant Commissioner with respect to the sales turnover. The learned Special Government Pleader would submit that an opportunity should be given to the Tribunal to consider the documents now produced by the assessee so as to ascertain as to whether the gold ornaments were returned only on March 17, 1998. But we are of the opinion that such a course is absolutely not necessary inasmuch as the very documents were produced by the assessee before the assessing authority as well as before the Appellate Assistant Commissioner as is evident from the averments in the respective orders of the assessing authority as well as appellate authority. The said fact is also found from the grounds of appeal filed by the Department before the Tribunal wherein they have clearly admitted about the receipt of the jewellery on March 17, 1998. In such circumstances, we are of the considered view that the Tribunal was not justified in setting aside the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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