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TMI Blog2011 (6) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... e deletion of penalty levied under section 22(2) of the TNGST Act by the Tribunal is legally sustainable?" Even though the Revenue has stated in the memorandum of valuation that they are questioning the cancellation of levy of penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act also, since the question of law framed on which the tax case was admitted relates to penalty under section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 alone, we do not find any justification to consider the correctness of the cancellation of levy of penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act in this tax case revision. The assessee herein collected eight per cent tax on overhead travelling cleaners, which was us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment to the tune of Rs. 5,60,282 which was equivalent to the excess tax collected by the assessee. An appeal was preferred by the assessee as against the order of the assessment challenging the levy of penalty under section 22(2) of the Tamil Nadu General Sales Tax Act, apart from the levy of penalty under section 12 (3) (b) of the Tamil Nadu General Sales Tax Act. The first appellate authority sustained the levy of penalty under section 22(2) of the Tamil Nadu General Sales Tax Act, but remanded the levy of penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act. Aggrieved by the same, the assessee went on appeal before the Tribunal. A perusal of the order of the Tribunal shows that in respect of the similar situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the decision State of Tamil Nadu v. Jaya Pharmacy reported in [1984] 57 STC 164 (Mad), which was distinguished by this court in the decision A. Vinayagamurthy Nadar v. Joint Commissioner-II (Commercial Taxes), Chepauk, Madras reported in [1993] 90 STC 562 (Mad), this court held that in a case of mutual mistake as regards the rate of tax, the levy of penalty under section 22(2) of the Act could not be upheld. This court pointed out that in the decision in State of Tamil Nadu v. Jaya Pharmacy reported in [1984] 57 STC 164 (Mad) the assessee therein collected 30 per cent tax on the sales of arishtams and subsequently at eight per cent treating the same as drugs. The assessee contested that the goods were taxable only at four per cent, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Joint Commissioner-II (Commercial Taxes), Chepauk, Madras reported in [1993] 90 STC 562 (Mad). Under identical circumstances, in the decision in State of Tamil Nadu v. K. Mohammed Ibrahim Sahib reported in [1991] 83 STC 402 (Mad), this court pointed out that the assessee, who carried on the business on decorticators, collected higher rate of tax from the mill owners at the behest of the Revenue and remitted the same to the Government. On the levy of penalty under section 22(2) of the Tamil Nadu General Sales Tax Act alleging contravention of section 22(1) of the Tamil Nadu General Sales Tax Act, this court held as follows (page 407 in 83 STC): ". . . Having itself directed the assessees to recover the tax from the purchasing merchants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t per cent on the overhead travelling cleaners, till the Commissioner's clarification came and the Revenue sought to revise the same at four per cent consequent on the Commissioner's clarification long after the assessment order was passed, we have no hesitation to hold that it is fair case of mutual mistake; that but for the assessment made by the assessing officer for the immediate preceding assessment year accepting the tax at the rate of eight per cent, the question of the assessee collecting tax at the rate of eight per cent would not have arisen. It is also of relevance to note that throughout the assessment year, the assessee had been collecting the tax at the rate of eight per cent and at no point of time, even during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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