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TMI Blog2018 (4) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... fter April 1, 1996 an explanation has been added below Section 12 (3) which requires the turnover relating to the tax assessed on the basis of the accounts of the assessee, to be disregarded, while determining the turnover on which the penalty is to be levied under Section 12 (3). Penalty set aside - Tax Case Revision Petition is dismissed. - Tax Case No. 60 of 2018 - - - Dated:- 20-3-2018 - S. Manikumar And V. Bhavani Subbaroyan, JJ. For the Petitioner : Mr.V.Hari Babu Addl. Govt. Pleader (Taxes) ORDER ( Order of the Court was made by S. Manikumar, J ) Instant Tax Case (Revision) is filed against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Chennai, dated 22/2/2012, made in S.T.A.No.43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng availment on the sale of goods to SEZ Rs.14,298/- 6. Aggrieved against the revised orders, dealer filed three appeals before the Appellate Deputy Commissioner (CT) III in A.P.17 of 2010 and while disposing the appeals, the Appellate Deputy Commissioner (CT)-III, remanded the assessment portion of the Assessing Officer, deleted the penalty levied by the Assessing Officer, under Section 27 (4) of TNVAT Act, 2006, for the year 2007 2008, vide order, dated 27/10/2010. 7. Assessee filed appeals before the Tribunal. Since the Department did not agree with the views of the Appellate Deputy Commissioner (CT) III, Cross Appeals were filed by the Department before the Tamil Nadu Sales Tax Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 13. Heard Mr.V.Haribabu, learned Additional Government Pleader (Taxes) for the appellant and perused the materials available on record. 14. Section 12(3)(b) of the Act deals with, submission of incorrect or incomplete return and for the purpose of levy of penalty, under Clause (b), the tax assessed on the following kinds of turnover shall be deducted from the tax assessed on final assessment, (i) twenty-five per cent of the difference of the tax assessed and the tax paid as per return, if the tax paid as per the return falls short of the tax assessed on final assessment by not more than five per cent; (i-a) fifty per cent of the difference of the tax assessed and the tax paid as per return, if the tax paid as per the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn has been submitted by the dealer under sub-section (1) within the prescribed period, and (ii). If the return submitted by him appears to be incomplete or incorrect. Sub-Section (3) empowers the assessing authority to levy the penalty only when it makes an assessment under sub-Section (2). In other words, when the assessing authority has made the assessment to the best of its judgment, it can levy a penalty. It is well known that the best judgment assessment has to be on an estimate which the assessing authority has to make not capriciously but on settled and recognised principles of justice. An element of guess-work is bound to be present in best judgment assessment but it must have a reasonable nexus to the available material and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion, as to whether, levy of penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959, was justifiable, particularly, when there was no suppression pointed out by the Revenue that the Claim of the assessee related only to concessional rate of tax. This Court held as follows: 8. .......Thus when the turnover assessed under the assessment order is drawn from the books of accounts itself, and there being no reference to any specific concealment of the turnover in the accounts, the question of invoking section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 would not arise. The Explanation to section 12(3)(b) of the Act specifies the turnover which merited to be excluded for the purpose of levy of penalty, one su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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) of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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