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: K. Ramagopal, Advocate. For the Respondent: Haja Nazirudeen, Spl.G.P.(Taxes)
(Prayer: Appeal filed under Section 37 of Tamil Nadu General Sales Tax Act, 1959 against the order of the Joint Commissioner dated 22.6.1999 and passed in S.M.R.No.619 of 1998. The Tax Case Appeal is originally admitted by the Tamil Nadu Taxation Special Tribunal on 14.11.2000 and on abolition of the said Tribunal the case was transferred to this Court and re-numbered.)
K. RAVIRAJA PANDIAN, J.
This is an appeal filed against the order of the Joint Commissioner (Commercial Taxes) suo motu revision, Office of the Special Commissioner and Commissioner of Commercial Taxes, Chepauk, Chennai- 5 dated 22.6.1999 and passed in S.M.R.No.619 of 1998, whereby the Joint Commissioner levied penalty under Section 12(3) of the Tamilnadu General Sales Tax Act in respect of assessment made under Section 12(2).
2. For the assessment year 1993-94, the petitioner was assessed to tax on a taxable turnover of Rs.2,33,063/- under T.N.G.S.T.Act. The books of accounts of the appellant were verified and accepted by the assessing officer, however levied penalty in a sum of Rs.20,976/- under Section 12(3)(A) of the Act on the tax, surcharge and additional surcharge due of the taxable turnover of Rs.2,33,063/- which has not been declared to the Department. The appellant preferred an appeal before the Appellate Assistant Commissioner, who, while confirming the levy of tax, deleted the penalty on the premise that the turnover reflected in the books of accounts has been accepted by the assessing officer and there was no best judgment assessment. The Joint Commissioner by exercising power under Section 34 of the Act has taken up the matter suo motu and set aside the order of the Appellate Assistant Commissioner in respect of deletion of the levy of penalty and restored the order of assessment. The correctness of the same is now put in issue in this appeal before us.
3. We have heard the argument of the learned counsel on either side and perused the materials on record.
4. Learned counsel appearing on either side on consensus submitted that the issue involved in this appeal is covered by a Division Bench judgment of this Court in the case of APPOLLO SALINE PHARMACEUTICALS (P) LTD. VS. COMMERCIAL TAX OFFICER (FAC) AND OTHERS reported in (2002) 125 STC 505, wherein it was held thus:
"....7. Though other sub-sections of Section 12 were amended by the State Legislature subsequent to the date of the judgment in the case of Jayaraj Nadar & Sons (1971) 28 STC 700 (SC), sections 12(1) and 12(2) have remained in the same form. The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty only in case where the assessment is a best judgement assessment made on an estimate and not by relying solely on the accounts furnished by the assessee in the prescribed return. On and after 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).
8. The assessments for the assessment years 1993-94 and 1994-95 which were assessments made on the basis of the accounts, and not based on any other material and were not estimates, have therefore, to be regarded as asse
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ssments made under section 12(1) to which the penal provisions of section 12(3) are not attracted. The levy of penalty for those two assessment years is set aside..." 5. In the light of the above judgment, the order of the Joint Commissioner restoring the penalty cannot be legally sustainable and it has to be set aside and the same is set aside and the appeal is allowed.