2024 (11) TMI 711

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..... nal) dated 20.06.2008. 2.The component of tax determined by the authorities has been paid in full the tax demand is not assailed before us. We hence do not advert to any of the facts relating to the same. What survives is the levy of penalty alone, under Section 23, which reads as follows: 'Section 23. Levy of penalty in certain cases.- If any person purchasing goods is guilty of an offence under clause (e) of sub-section (2) of section 45, the assessing authority, may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and a half times the tax payable on the turnover relating to the sale of such goods at a rate which is equal to the rate prescribed .....

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..... d on 21.02.1997, effective from that date. The assessment year in question in 1998-99. Hence, prima facie it appears that the rate of tax of 16% adopted is incorrect as the rate ought to have been 13%. 5. Thirdly, learned counsel for the petitioner refers to Circular dated 05.01.2001, which has been cited by the Division Bench of this Court in W.P.No.36940 of 2004 (Victus Dyeing V. Sales Tax Appellate Tribunal decision dated 31.10.2022). 6. According to him, the portion in italics extracted at paragraph 22 of the aforesaid order states that for levy of penalty under Section 23 of the TNGST Act, tax rate should be only 1% of the difference, whereas in the present case, it is 150%. 7. Mr.Prashanth Kiran, learned Government Advocate for .....

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..... uance of the Circular appears to an incorrect thinking on the part of the assessing officers that the penalty under Section 23 of the Act must mandatorily of 150% only. 8.What the Commissioner has sought to clarify that the provision allows for discretion to be exercised by the assessing officer under Section 23 to levy penalty of a sum 'not exceeding one and a half times the tax payable'. Hence, the authorities may impose penalty at any rate upto amount from one to 150%. Despite the officer used to as a matter of rote and mechanically levy penalty only 150%. This is made clear from the later portion of the Circular where the Commissioner states as follows: 'It is to be seen that Section 23 of the TNGST Act provides for the m .....

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