Penalty for unauthorised sales tax collection upheld where refund was unproved and surcharge penalty provisions applied equally.

Penalty for collecting sales tax without liability was sustained because credit notes and a certificate of posting did not prove actual refund to customers, especially where the claimed refund steps were taken only after notice and the appellant failed to establish repayment despite being given the opportunity. The court also held that section 22 of the Tamil Nadu General Sales Tax Act, 1959 extended to surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971, because the surcharge statute made the general sales tax provisions applicable in the same manner as to sales tax. The revisional challenge therefore failed on both grounds and the penalty was maintained.

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Issues: (i) Whether penalty levied for collecting sales tax on transactions not liable to tax was unsustainable because credit notes were later issued and refund was claimed to customers; (ii) Whether section 22 of the Tamil Nadu General Sales Tax Act, 1959 applied to collection of surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971.

Issue (i): Whether penalty levied for collecting sales tax on transactions not liable to tax was unsustainable because credit notes were later issued and refund was claimed to customers.

Analysis: The appellant had collected tax from customers without liability and was called upon to show that the amounts had been refunded. The credit notes and certificate of posting were not accepted as sufficient proof, particularly because the alleged refund steps were taken only after notice and the appellant failed to avail the opportunities given to establish actual refund.

Conclusion: The penalty was rightly sustained and the appellant's challenge failed.

Issue (ii): Whether section 22 of the Tamil Nadu General Sales Tax Act, 1959 applied to collection of surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971.

Analysis: Section 3(2) of the Tamil Nadu Sales Tax (Surcharge) Act, 1971 provides that the provisions of the Tamil Nadu General Sales Tax Act, 1959 apply to surcharge in the same manner as they apply to sales tax, unless otherwise provided. On that language, the general penalty machinery under the Act extends to surcharge as well.

Conclusion: Section 22 applied to surcharge, and the Board's action was upheld.

Final Conclusion: The challenge to the revisional order failed on both grounds, and the penalty imposed by the assessing authority was maintained.

Ratio Decidendi: Where the statute makes the general sales tax provisions applicable to surcharge in the same manner as to tax, the penalty provisions extend to surcharge, and later unproved refund steps do not undo liability for unauthorised collection.

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