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TMI Blog2014 (5) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Board voluntarily - Once, the assessee received additional sales tax, it certainly amounts to violation of Section 2(2) - So all the authorities below had given a finding that there is collection of additional sales tax and hence there is a violation of the provisions of the Act - Thus, the same finding is confirmed. Whether Tribunal was correct in upholding the levy of penalty imposed u/s 12(5)(iii) of the TNGST Act, 1959 – Reduction in Penalty – Held that:- Section 3-A contemplate quantum of amount should not exceed 1 = times such amount - Assessee is a Government of India undertaking and there was agreement between the Electricity Board and assessee - As per the agreement, Additional sales tax was reimbursed and the same amounts to clear violation of provisions of Section 2 therefore, liable to pay levy penalty u/s 3A - Section 3-A prescribe only maximum amount of penalty and there is no minimum amount of penalty prescribed - After considering the facts and circumstances and also the bona-fide belief of assessee, this Court of the view that the authorities are wrong in levying 100% penalty - It is reasonable to levy 20% of penalty as against 100% penalty levied by the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Tamil Nadu Electricity Board for erecting and commissioning a captive power plant, during the relevant assessment year viz., 1991-92. The petitioner/assessee reported a total turnover of Rs.16.85,15,016.13 and a taxable turnover of Rs.Nil. The Assessing Officer originally assessed on a total and taxable turnover of Rs.17,31,59,589/- and Rs.15,17,09,238/- respectively. In the assessment order dated 30.09.1993, the Assessing Officer observed that the dealer have collected Additional Sales Tax from TNEB at 2.25% amounting to Rs.34,13,471/- on their sales turnover. Therefore, proposed to levy penalty under Section 22(2) of the Tamil Nadu Additional Sales Tax Act at 100% of the excess collection made amounting to Rs.34,13,471/-. After receiving the objections from the assessee, the Assessing Officer dropped the levy of the penalty. Subsequently, a revised order dated 24.01.1995 was passed by the Assessing Authority and levied a penalty of Rs.34,13,471/- under Section 3A of the Tamil Nadu Additional Sales Tax Act, 1970 and Rs.19,03,682/- under Section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959. Aggrieved by the same, the assessee filed appeal before the Appellate Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal is in accordance with law in respect of penalty under Section 12(5)(iii) of the Tamil Nadu General Sales Tax Act. Therefore, the same may be confirmed. 5. Heard the learned counsel on either side and perused the materials available on record. In respect of levy of penalty for collecting Additional Sales Tax, Sections 2(2), 2(3) and 3(A) are the relevant provisions and Sections 2(2) and 2(3) of the Tamil Nadu Additional Sales Tax Act reads as follows:- "Section 2(2) Notwithstanding anything contained in the said Act, no dealer referred to in sub-section (1) shall be entitled to collect the additional tax payable under the said sub-section. Section 2(3) Any dealer who collects the additional tax payable under sub section (1) in contravention of the provisions of sub-section (2) shall be punishable with fine which may extend to one thousand rupees, and no court below the rank of a Presidency Magistrate or a Magistrate of the first class shall try any such offence. " From a reading of the above provision, it is clear that no dealer is entitled to collect additional sales tax payable under the provision and whoever collects the additional tax in violation of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower authority. It is a question of fact. Findings are based on valid materials and evidences. Therefore, the same finding is confirmed. Further, the learned counsel appearing for the assessee submitted that in the present case, the Assessing Authority levied 100% of penalty. Section 3-A contemplate quantum of amount should not exceed 1 = times such amount. In the present case, the petitioner/assessee is a Government of India undertaking and there was agreement between the Electricity Board and the petitioner/assessee. As per the agreement, Additional sales tax was reimbursed and the same amounts to clear violation of provisions of Section 2 of the Tamil Nadu Additional Sales Tax Act and hence, liable to pay levy penalty under Section 3A of the Tamil Nadu Additional Sales Tax Act. Section 3-A of the TNAST Act prescribe only maximum amount of penalty and there is no minimum amount of penalty prescribed. After taking into consideration the facts and circumstances of the case and also considering the bonafide belief of the petitioner/assessee, we are of the view that the authorities are wrong in levying 100% penalty. We feel that the same is excessive and under such circumstances, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst such re-assessment. Section 16(2) In making an assessment under clause (a) of sub-section (1), the assessing authority may, if it is satisfied that the escape from the assessment is due to wilful non-disclosure of assessable turnover by the dealer, direct the dealer, to pay, in addition to the tax assessed under clause (a) of sub-section (1), by way of penalty a sum which shall be - (a) fifty per cent of the tax due on the turnover that was filfully not disclosed if the tax due on such turnover is not more than ten percent of the tax paid as per the return ; (b) one hundred per cent of the tax due on the turnover that was wilfully not disclosed if the tax due on such turnover is more than ten per cent but not more than fifty per cent of the tax paid as per the return ; (c) one hundred and fifty per cent of the tax due on the assessable turnover that was wilfully not disclosed, if the tax due on such turnover is more than fifty per cent of the tax paid as per the return ; (d) one hundred and fifty per cent of the tax due on the assessable turnover that was wilfully not disclosed, in the case of self-assessment referred to in sub-section (1) of Section 12 : Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of the Act. After extracting the provisions contained in Section 16(2) of the TNGST Act in paragraph 6 of the order, it is stated that there should be wilful non-disclosure of the turnover in the return and the turnover was shown, but under the bona fide belief, the assessee claimed exemption. In such circumstances, Section 16(2) cannot be invoked. In paragraph 7 and 8 of the above cited decision, it is held as follows:- "7. From a reading of the above, it is clear that for the purpose of levying penalty under Section 16(2), there should be wilful non-disclosure of the turnover in the return. In the present case, the turnover was shown, but under the bona fide belief, the assessee claimed exemption. Therefore, the condition precedent for invoking the provision under Section 16(2) has not been satisfied. In the case of State of Tamil Nadu Vs. Sri Shanmughananda and Co., reported in (1997) 104 STC 61 this Court considered the scope of levying penalty under Section 16(2) of the Act. The relevant portion of the order reads as under :- "5. In so far as the merits of case, in levying penalty under Section 16(2) of the Act, is concerned, it was represented that the turnover of Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to prove those ingredients before a penalty can be imposed. Since the burden of proof in a penalty proceeding varies from that involved in an assessment proceeding, a finding in an assessment proceeding that a particular receipt is income cannot automatically be adopted as a finding to that effect in the penalty proceeding. In the penalty proceeding the taxing authority is bound to consider the matter afresh on the material before it and, in the light of the burden to prove resting on the revenue, to ascertain whether a particular amount is a revenue receipt. No doubt, the fact that the assessment order contains a finding that the disputed amount represents income constitutes good evidence in the penalty proceeding but the finding in the assessing proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding. " 10. Also in the case of Oveekee Textiles Vs. The Deputy Commercial Tax Officer, Tiruchengode reported in (1971) 27 STC 439, this Court considered the scope of the provision of Section 16(2) of the Madras General Sales Tax Act and held that the levy of penalty under Section 16(2) is conditional upon the satisfaction of the authority that the escap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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