9911796707
TMI Blog2016 (9) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent also levied penalty under Section 12(3)(b) of the TNGST Act amounting to Rs. 94,248/-. 3. Aggrieved with the orders of the Respondent, the petitioner preferred an appeal before the Appellate Assistant Commissioner (CT) Vellore, disputing the contract receipt and the penalty. The Appellate Authority in his proceedings in A.P.No.202 of 2006 dated 26.10.2006 had accepted the contentions of the petitioner and hold that the transaction is a works contract and assessed the same under Section 3-B of the TNGST Act by refixing the taxable turnover and also refixed the penalty. According to the petitioner, the Appellate Authority had not deleted the penalty in toto even though the facts and circumstances does not warrant any penalty as per the explanation added to Section 12(3) (b) of the TNGST Act. 4. The petitioner further filed a Second Appeal before the Sales Tax Appellate Tribunal, Chennai disputing the penalty refixed under Section 12(3)(b) of the TNGST Act, on the grounds inter alia that, as per the Explanation Clause added to Section 12(3) of the TNGST Act, the penalty refixed by the Appellate Authority is unwarranted. The Appellate Tribunal, in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract and upon perusal of records also, the Tribunal has found that the dealer has reported the turnover under Section 7(c) of the TNGST Act, and paid the taxes, in such circumstances, explanation (i) and (ii) to Section 12(3)(b) of the Act, would squarely apply to the case on hand. 7. As regards disclosure in the books of accounts, whether would warrant suppression and whether in such circumstances, explanation to Section 12(3)(b) of the Act, would be applicable and whether penalty could be levied, learned counsel for the revision petition relied on a decision in Indira Industries v. State of Tamil Nadu reported in 2014 (69) VST 139 (Mad.). 8. Per contra, Dr.Anitha Sumant, Special Government Pleader appearing for the respondents submitted that explanations 1 and 2 contained in Section 12(3) of the Act, are qualifications to be satisfied by the assessee. She further submitted that what the appellate authority has done, is refixation of the disputed turnover, and correspondingly, imposed penalty. According to her, levy of penalty under Section 12(3) of the Act is mandatory. She also submitted that there is no case for applying any of the clauses (i) and (ii) mentioned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him in a year, tax calculated at the following rate, namely:- (i) Civil Works contract. Two percent of the total contract value of the civil words executed; (ii) All other works Contracts. Four percent of the total contract value of the works executed. 13. Taking note of the finding of the appellate authority extracted supra, the revision petitioner is entitled to invoke Section 7-C of the Act, which starts with a notwithstanding clause and gives option to the assessee that instead of paying tax, in accordance with Section 3-B, he may pay, either on the total value of each works contract or on the total value of all works contract, executed by him, in a year, tax calculated at the rates stated supra. Payment of 4% tax on the turnover of composite works contract, under Section 7C of the Tamil Nadu General Sales Tax Act, has been admitted. According to the assessee, the Tribunal has only considered Clause (iii) of the explanation to Section 12(3)(b) of the Act and failed to consider Clauses (i) and (ii), applicable to the case on hand. Per contra, it is the contention of the respondent that clauses (i) and (ii) are not applicable and that the Tribunal has rightly taken n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the execution of works contract, or such amounts calculated at the rate specified in column (3) of the Table below, if they are not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority. THE TABLE Sl.No Type of works contract Labour or other charges as a percentage value of the works contract 1 Electrical contracts 15 2 All structural contracts 15 3 Sanitary contracts 25 4 Watch and/or clock repair contracts 50 5 Dyeing contracts 50 6 All other contracts 30 (f) all amounts (including the tax collected from the customer) refunded to the customer or adjusted towards any amount payable by the customer, in respect of unexecuted portion of works contract based on the corrections on account of measurements or check measurements, subject to the conditions that (i) the turnover was included in the return and tax paid: and (ii) the amount (including the tax collected from the customer) is so refunded or adjusted, within a period of six months from the due date for filing of the return in which the said amount was included and tax paid." 15. It is the specific case of the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty would not be justifiable, if at the time of assessment, turnover has been recorded as per the books of accounts, verified by the department and in such circumstances, suppression cannot be attributed. Transaction giving rise to taxable turnover, has been categorically declared by the assessee as composite works contract and at the concessional rate of 4%, tax has been paid. In such circumstances, it cannot be contended that it is a deliberate and wilful non-disclosure of turnover, in the return and thus, rightly proceeded, under Section 12(3)(b) f the Act, which deals with Submission of incorrect or incomplete return. Though penalty is leviable under the provisions of the Act, while exercising discretion, the assessing officer is required to take note of the bona fides of the assessee. Contention of the respondent that levy of penalty under Section 12(3) is automatic, cannot be accepted, in the light of the explanations to Section 12(3) of the Act. 19. In Indira Industries v. State of Tamil Nadu reported in 2014 (69) VST 139 (Mad.), this Court considered a question, as to whether, levy of penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959, was justifia ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
