Later tax entry overrides earlier concession for branded milk products; incorrect return also attracts slab-based penalty without wilful default.

A later statutory entry taxing milk products at 12% displaced the earlier concessional treatment for unregistered-brand goods. The earlier notification reducing tax no longer applied once the same goods were specifically brought within the later taxable entry, and the absence of registration in the brand name did not prevent the levy because the entry covered milk products sold under a brand name, whether registered or not. Penalty under the return-default provision was also attracted because the return was incorrect, the tax paid fell short of the tax assessed, and the statutory slab fixed the penalty at 100% for the relevant shortfall range without requiring proof of wilful omission.

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Issues: (i) Whether milk products sold under the brand name "Cocomilk" were liable to tax at 12% under item 1(viii) of Part E of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 despite the earlier concessional notification; and (ii) whether penalty under section 12(3)(b)(iii) of the Tamil Nadu General Sales Tax Act, 1959 was leviable.

Issue (i): Whether milk products sold under the brand name "Cocomilk" were liable to tax at 12% under item 1(viii) of Part E of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 despite the earlier concessional notification.

Analysis: The later amendment bringing milk products specifically under the 12% entry displaced the earlier concessional treatment. The earlier notification reducing tax on unregistered-brand milk products had also been cancelled, and once a later notification or statutory entry prescribes a tax rate for the same goods, the prior exemption or reduction ceases to operate. The fact that the brand name was not registered did not assist the assessee because the relevant entry covered milk products sold under a brand name, whether registered or not.

Conclusion: The levy of 12% tax on the milk products was valid and is upheld in favour of Revenue.

Issue (ii): Whether penalty under section 12(3)(b)(iii) of the Tamil Nadu General Sales Tax Act, 1959 was leviable.

Analysis: Penalty under section 12(3)(b) applies where an incorrect or incomplete return results in a shortfall between tax paid and tax assessed, and the statutory slab governs the quantum of penalty. The shortfall here fell within the range attracting 100% penalty under clause (iii). Wilful omission was not a prerequisite for levy under the provision, and the return was treated as incorrect because the sales were shown at 5% instead of the applicable 12%.

Conclusion: The penalty was correctly imposed and is upheld in favour of Revenue.

Final Conclusion: The tax revision fails, and the assessment of tax, surcharge, and penalty is sustained in full.

Ratio Decidendi: Where a later statutory entry or notification specifically taxes goods, any earlier exemption or concessional rate for the same goods stands displaced, and penalty for an incorrect or incomplete return follows according to the statutory slab without proof of wilful default.

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