Assessee penalized for undisclosed turnover on calendars, Tribunal decision overturned

The Court found that the assessee failed to disclose sales turnover on calendars in their accounts, leading to the imposition of a penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959. Despite the assessee's claim of acting solely as an intermediary, the Court determined that there was insufficient evidence to support this assertion. As a result, the Tribunal's decision to cancel the penalty was overturned, and the penalty imposed by the Deputy Commissioner was reinstated. The petition was allowed, with no costs awarded.

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Issues:
Penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 for non-disclosure of sale turnover on calendars by the assessee for the assessment year 1977-78.

Analysis:
The State, as the petitioner, sought to levy a penalty on M/s. Union Carbide India Ltd. for not disclosing calendar sales turnover in their accounts. The department discovered that the sale turnover of calendars amounting to Rs. 46,500 was not included in the account books or returns filed by the assessee. The State argued that the assessee did not act as an intermediary between parties as claimed, and failed to disclose the sale value of the calendars in question. The State contended that the penalty imposed should not have been cancelled by the Tribunal based on the precedent cited. The assessee, on the other hand, maintained that it acted solely as an intermediary, placing orders for printing calendars and distributing them as per instructions from the Calcutta party. The assessee claimed that the charges collected for calendars were remitted back to the Calcutta party, thus no sale turnover should be included in their assessment. The Tribunal had relied on a previous decision to cancel the penalty, which the State contested.

Upon reviewing the facts, it was established that the assessee did place orders for printing calendars, paid the printing charges, and distributed the calendars to constituents. However, there was no evidence to support the claim that the charges collected were remitted back to the Calcutta party. The Court found that the assessee had not disclosed the payment for printing the calendars or the charges collected in its accounts. The Court noted that the case cited by the assessee to support its position involved different circumstances where the assessee acted purely as an intermediary without property in the goods transferred. In this case, the Court concluded that there was no evidence to prove that the charges collected were returned to the Calcutta party, leading to the inability to accept the assessee's contention of no wilful non-disclosure. Therefore, the Court set aside the Tribunal's decision and restored the penalty imposed by the Deputy Commissioner. The petition was allowed, with no costs awarded.

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