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TMI Blog2015 (11) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law much less any substantial question of law arises for consideration in these revisions. Insofar as levy of penalty under section 16(2) of the TNGST Act, for the assessment year 1987-88 and under section 12(5)(iii) of the TNGST Act for the assessment year 1988-89 is concerned, the provision of section 16(2) and section 12(5)(iii) of the TNGST Act provides for levy of penalty between 50 per cent and 150 per cent. The assessing authority levied penalty at 150 per cent whereas the Tribunal has thought it fit to reduce the same at 75 per cent. We find no reason to interfere with the discretion exercised by the Tribunal in the case of suppression of material fact with an intention to avail wrongful benefit. - Decided against assessee. - Tax Case (Revision) Nos. 42, Tax Case (Revision) Nos. 43 of 2014, M. P. No. 1 of 2014 - - - Dated:- 19-11-2014 - SUDHAKAR R. AND KARUPPIAH R. JJ. Mrs. R. Hemalatha for the petitioner. Dr. Mrs. Anitha Sumanth for A. R. Jayapratap, Special Government Pleader (Taxes), for the respondent. ORDER The above tax case (revisions) are filed by the assessee as against the order of the Tamil Nadu Sales Tax Appellate Tribunal raising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the HDPE bags are not exempted from sales tax. 3. The brief facts as. recorded by the Tribunal in its order are as follows:- For the assessment year 1987-88, the assessee Tvl. Continental Packaging at Plot No. 6, First Main Road, Pammal, Chennai-76 were originally assessed on a total and taxable turnover of ₹ 33,32,017 and ₹ 6,90,831, respectively, under the TNGST Act, 1959, in the proceedings dated August 18, 1988. Subsequently, based on the inspection on July 21, 1999 by the enforcement wing, the assessment was revised and re-determined the total and taxable turnover of ₹ 33,32,017 and ₹ 6,90,331, respectively in the proceedings dated November. 27, 1989. The taxable turnover included, inter alia, the disallowance of claim of exemption on sales of HDPE fabrics to the extent of ₹ 6,11,263 as per the D7 record recovered at the time of inspection on August 4, 1988. Against which, the assessee preferred an appeal before the Appellate Assistant Commissioner (CT)-V, Kancheepuram. The Appellate Assistant Commissioner, in his order dated May 30, 1995 (common order), had sustained 50 per cent of the suppression and modified the penalty accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had preferred second appeal before the Tribunal and the Tribunal remanded the assessment back to the assessing officer. Based on the remanded order, the assessing officer had revised the assessment order and re-determined the total and taxable turnover of ₹ 42,49,531 and ₹ 19,33,720 respectively in his order dated June 28, 2002. The assessing officer had also levied surcharge of ₹ 6,804, additional surcharge of ₹ 6,804, additional sales tax of ₹ 24,172 and penalty of ₹ 56,391 being 150 per cent of the tax due on the actual suppression levied under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959. Again, the aggrieved assessee preferred an appeal before the Appellate Assistant Commissioner, who vide his order dated October 11, 2004 made in A.P. No. 220/02, based on records produced and arguments put forth, set aside the addition made and allowed the appeal with consequential levies of surcharge, additional surcharge, additional sales tax and also penalty levied by the assessing officer. Not satisfied with the order of the first appellate authority, the State has preferred an appeal before the Tribunal seeking restoration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Thus he has increased the sale value of fabrics based on fabrics by ₹ 6,26,561. It is to be mentioned here that while issuing notice, the assessing officer has attached the details of 117 slips of lorry way bills and the turnover covered in this lorry way bills. It is also seen from the assessment orders that as directed by this Tribunal in the remand order dated November 25, 1997, the assessing officer had taken into account only the turnovers covered in the lorry waybills recovered and restricted the exemption claim only to that extent. As rightly contended by the learned State Representative, the letter of Tvl. Southern Roadways Limited stating that though they had mentioned in the lorry way bills that the description of item transported was 'bags' the party had actually sent only plastic fabric, could not be considered as a valid evidence as the letter was addressed to the assessee/Tvl. Continental packaging and between the assessee and Tvl. Southern Roadways Limited there is a beneficial relationship. In as much as the assessee is giving regular business to Tvl. Southern Roadways Limited the letter of Tvl. Southern Roadways Limited could not be accepted as va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is our considered view, is not correct. Hence, we hold that the order of the first appellate authority is not in order and we, setting aside the orders of the first appellate authority and restore the orders of the assessing officer, for both the assessment years under appeal. 7. With reference to levy of penalty (point No. (ii)), the Tribunal held as follows:- From the above, it is clear that the penalty under section 16(2) could be leviable by the assessing officer, if he satisfied that the escape from assessment is due to wilful non-disclosure of assessable turnover and thereafter he may direct the dealer to pay, by way of penalty, a sum which shall not less than 50 per cent but which shall not be more than 150 per cent of the tax so assessed. From the reading of section 12(5)(iii), it is clear that the assessing authority may direct the dealer to pay by way of penalty, a sum which shall not be less than 50 per cent but shall not be more than 150 per cent of the difference in tax payable on the turnover disclosed in the return and that determined by the assessing authority. From the above, it is also clear that it is to be discretionary power of the assessing officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire facts and circumstances but also place the entire materials that has been gathered by the Revenue but available only in the D3 file and not specifically put to the appellants for proper rebuttal...' The enhancement petition filed in this regard would also stand remitted to the assessing officer and it is open to the learned assessing officer to draw his own conclusion having regard to the materials on hand and generalizing the issue at large'... 11. It is based on this remand order for de novo consideration, we find the 1 assessing authority had taken all D7 records and found that there were 117 lorry receipts showing sale of sacks and fabrics. Based on this, the assessing officer re-determined the taxable turnover in respect of the assessment year 1987-88 after allowing exemptions in the following manner:- 5. In view of the above, it was proposed to revise the assessment of the dealers for the year 1987-88 under the TNGST Act, 1959 as detailed below, after due verification of the records and statements, in pursuance of the order of the Tamil Nadu Sales Tax Appellate Tribunal read above.:- Taxable turnover declared by the dealers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges and additional surcharge at 10 per cent and 10 per cent, respectively of the tax due. It was also proposed to levy additional tax at 1.25 per cent of the taxable turnover of ₹ 19,33,720. It was further proposed to levy penalty at 150 per cent of the tax, SC, ASC due on the actual suppression of ₹ 6,26,562 under section 12 of the TNGST Act, 1959. 13. The assessing authority in respect of the assessment year 1988-89 was proceeded to determine the sale of bags as fabrics on the basis of verification of 113 slips. 14. After analysing the documents, a detailed order has been passed in both the cases rejecting the plea of the petitioner on the basis of the materials, which showed that the buyer of the goods had not produced any record for stitching charges, which makes it clear that what was sold was only bags and not HDPE fabrics. 15. In this view of the matter, the assessing authority levied penalty at 150 per cent, which came to be reduced to 75 per cent by the Tribunal considering the facts and circumstances of the case. 16. We find that the discrepancy, as attempted to be pointed out by the learned counsel appearing for the petitioner that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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