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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 ..... pondent : S. Ramanathan ORDER:- The order of the court was made by MRS. CHITRA VENKATARAMAN J.--This revision petition is filed by the Revenue as against the order of the Sales Tax Appellate Tribunal for the assessment year 1995-96. The revision is admitted on the following substantial question of law: "Whether, in the facts and circumstances of the case, the 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax at four per cent. The Revenue viewed that collection of rate of tax at eight per cent by the assessee was in contravention of the provisions of the Act warranting levy of penalty under section 22(2) of the Tamil Nadu General Sales Tax Act. Accordingly, notice was issued to the assessee and after hearing the objection, the levy of penalty was made as part of the assessment to the tune of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed the levy of penalty holding that section 22(2) of the Act leaves no option to the assessing authority once he comes to the conclusion that the dealer had collected an amount by way of tax or purported to be by way of tax in contravention of sub-section (1) of section 22 of the Act, thus leading to the levy of penalty. We have gone though the said decision. It is seen that 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 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealised the mistake in accepting the return of the assessee, there was no question of any mutual mistake and the facts in that case were distinguishable from the one in State of Tamil Nadu v. Jaya Pharmacy reported in [1984] 57 STC 164 (Mad). The facts in the present case before us do not stand on the same lines of what was considered in the decision in A. Vinayagamurthy Nadar 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 owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fact that the assessment in respect of the immediate preceding year, viz., 1994-95 was made by the Revenue accepting the rate of tax at eight per cent. The said assessment order has reached finality and it has not been in any manner revised by the Revenue. Given the fact that both the assessee and the assessing authority, were under the impression that that the rate of tax was at eight 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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