At, High Court of Judicature at Madras
By, THE HONOURABLE MR. JUSTICE K. RAVIRAJA PANDIAN & THE HONOURABLE MR. JUSTICE M.M. SUNDRESH
For the Appellant: A.Thiagarajan, Advocate. For the Respondent: Haja Nazirudeen, Special Government Pleader.
(Tax Case appeal filed under section 37 of the Tamil Nadu General Sales Tax Act, 1959 against the order of the Joint Commissioner of Commercial Taxes III (SMR), Chennai dated 01.10.1996 passed in Ref. No.F3/112815/93/SMR 319/95.)
K. Raviraja Pandian, J.
This is an appeal filed under section 37 of the Tamil Nadu General Sales tax Act against the order of the Joint Commissioner made in suo motu revision dated 01.10.1996. In that revision, the Joint Commissioner restored the revision of assessment made by the assessing officer along with penalty, which were set aside by the first appellate authority.
2. The facts are : The assessee is a dealer in groundnut kernal. For the assessment year 1990-91, it reported a total and taxable turnover of Rs.36,50,954/- and Rs.1,38,322/- respectively. On the reported turnover assessment was made. However, on further verification of the books of accounts of the dealer, it was found that the dealer had purchased ground nut kernal to the tune of Rs.1,43,000/- from one K.Senthilvel of Ramayagoundar pudur, who was already declared as bill trader in various other cases. Hence, the assessing officer rejected the claim of exemption relating to the said turnover on purchase made from the said Senthil Kumar and assessed the said turnover to tax at 3% and levied penalty under section 12(3) of the Act. The Appellate Assistant Commissioner, on appeal, deleted the tax on the said turnover and consequently deleted the levy of penalty also on the ground that during the relevant period the said Senthilvel had got his registration certificate renewed and on further ground that the goods were passed through the check post, which was evident from the goods vehicle record. The Joint Commissioner, while exercising his suo motu revision power having found that the order of the first appellate authority is prejudicial to the interest of the revenue and also erroneous caused a show cause notice calling upon the dealer to show cause as to why the said turnover should not be brought to tax and penalty levied by the assessing officer should not be restored. Upon hearing the parties, as already stated, the purchase turnover of groundnut kernal from the said Senthilvel of Ramayagoundar Pudur was restored and consequently the penalty was also restored. The present appeal is filed against that order of the Joint Commissioner of Commercial Taxes.
3. We heard Mr.Thiagarajan, learned counsel for the assessee and also the learned Special Government Pleader and also perused the materials available on record.
4. In respect of the very same assessment year and also the previous or subsequent assessment years, the said Senthilvel was declared as a bill trader by the department. It is on record that in respect of another dealer Tvl. Vijayalakshmi and Co., Mulanur and Sri Palani Andawar Mills, Mulanur, the Appellate Assistant Commissioner, while considering the purchases made from the very same Senthilvel, rejected the claim of second sale exemption on the sole ground that the said Senthilvel was only a bill trader and he never dealt with the goods, but only passed on the bills. In addition to that, one more interesting factor is available on record. That fact was that on 25.04.1992, the premises of Senthilvel was inspected by the respondent authorities before whom the Senthilvel has admitted that he was issuing only bills for specific commission and all the amounts he received were only by way of cash and not either by way of cheque or by way of demand draft. In addition to the admission statement given by Senthilvel, the department has also obtained a legal affidavit dated 15.04.1992. In addition to that 11 other dealers who claimed similar exemption on second sales on the premise that the goods were purchased from the said Senthilvel who were coming within the Pollachi jurisdiction were held to be not entitled to second sale exemption on a finding recorded that the said Senthilvel is only a bill trader. Thus, the voluminous materials available with the department show that the said Senthilvel, the alleged seller is only a bill trader and he never dealt with any goods. When that being the factual position, the claim of second sale exemption by the assessee on the ground that the first sale is effected by the said Senthilvel cannot be a ground for granting exemption in favour of the assessee. Thus, the order of the Joint Com
Please Login To View The Full Judgment!
missioner restoring the taxable turnover and levy of tax on that turnover is unassailable. Consequently, the penalty under section 12(3) of the Act is also leviable as the claim made is false in order to avoid local tax payable to the Government. Hence, the restoration of the tax on the turnover and also the penalty by the Joint Commissioner is perfectly valid and correct. There is no material or additional factor available on record to take a different view. The appeal is dismissed. No costs.