At, Before the Madurai Bench of Madras High Court
By, THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM & THE HONOURABLE MR. JUSTICE P. VELMURUGAN
For the Petitioner: No Appearance. For the Respondent: R. Karthikeyan, Additional Government Pleader.
(Prayer: Tax Case Revision is filed under Section 38 of the TNGST Act, 1959, to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai-104 order in S.T.A.No.860 of 2000 dated 20.03.2002)
T.S. Sivagnanam, J.
1. Heard Mr.R.Karthikeyan, learned Additional Government Pleader appearing for the respondent.
2. This Tax Case Revision has been filed by the dealer challenging the order passed by the Tamil Nadu Sales Tax Appellate Tribunal, [Main Bench], Chennai-104, in S.T.A.No.860 of 2000 dated 20.03.2002.
3. The Tax Revision Case has been admitted on the following substantial questions of law:-
'(i) Whether the Tribunal is right in law in setting aside the order of the Appellate Assistant Commissioner and restoring the assessment order of the assessing authority in respect of 12(3)(c) penalty?
(ii) Whether the Tribunal is right in law in confirming the penalty under Section 12(3)(c) levied by the assessing officer?'
4. The petitioner is a dealer in bio-mass briquettes. They reported their turnover for the assessment year 1996-97 and on verification, the authorities found that the petitioner had purchased wood pieces, wood chips in the name of firewood under bought notes from unregistered dealers and utilised the same as raw material for manufacturing bio-mass briquettes. As the firewood purchased was not for fuel purpose the turnover was assessed to tax and for the difference in the tax assessed and paid, the Assessing Officer has also invoked penalty under Section 12(3)(b) of the TNGST Act 1959.
5. The question which arises for consideration in the instant case is only with regard to the penalty under Section 12(3)(c) of the TNGST Act, 1959 and the same read as follows:-
'12. Procedure to be followed by the assessing authority- (1) (a) The assessment in respect of a dealer shall be on the basis of the return relating to his turnover submitted in the prescribed manner within the prescribed period.
(b)Notwithstanding anything anything contained in clause (a) of this sub-section, a dealer whose turnover which includes the total turnover under this Act, inter-State sales, export sales and stock transfers to outside the State, does not exceed ten crores of rupees in a year, may make a selfassessment for that year in the manner and subject to such conditions as may be prescribed.
(c)The provisions of clause (b) and sub-section (1- A) shall apply to the assessments for the financial years commencing from the 1st day of April 2001.
(1-A)Notwithstanding anything contained in [clause (b) of sub-section (1), five percent of the total number] of such assessments shall be selected by the Commissioner in such manner as may be prescribed for the purpose of detailed scrutiny regarding the correctness of the return submitted by the dealer in this connection and in such cases, final assessment orders shall be passed in accordance with the provisions of this Act.
(1-B) Save as otherwise provided in this Act and subject to such rules as may be prescribed, the procedure relating to assessment shall apply to the self-assessment under the proviso to sub-section (1).
(2) If no return is submitted by the dealer under sub-section(1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incomplete or incorrect, the assessing authority shall, after making such enquiry as it may consider necessary, assess the dealer to the best of its judgment, [subject to such conditions as may be prescribed] :
Provided that before taking action under this subsection the dealer shall be given a reasonable opportunity of proving the correctness or completeness of any return submitted by him.
(3) In addition to the tax assessed under subsection 2[(1) or] (2), the assessing authority shall, in the same order of assessment passed sub-section 2[(1) or] (2) or by a separate order, direct the dealer to pay by way of penalty, a sum--
6. A bare reading of the above provisions, it is evidently clear that the said sub-section authorises levy of penalty in the case of failure to file the returns due from a dealer, one and a half times the tax assessed on final assessment and a graded amount from one fourth to one and a half times the difference between the tax assessed and the tax paid by the dealer. The quantum of penalty in the latter case is thus levied with reference to the tax attempted to be evaded, as determined by the Assessing authorities. The use of the word 'shall' in the substan
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tive part of this sub-section clearly indicates that the levy is mandatory and the Assessing Authority has no discretion to levy any lesser amounts as penalty. Furthermore, the assessment relates to 1994-95, that is much after the amendment, when there was no discretion with the authority regarding the levy of penalty to be imposed under the said provision. 7. Thus, the questions of law framed in this revision is answered in favour of the revenue. Accordingly, this Tax Case Revision is dismissed. No costs.