1998 (8) TMI 592 - AT - VAT and Sales Tax

Tribunal rules penalties invalid due to lack of jurisdiction under tax laws

Mohan Breweries & Distilleries Ltd. Versus Commercial Tax Officer, Porur Assmt. Cicle, Chennai

Mohan Breweries & Distilleries Ltd. Versus Commercial Tax Officer, Porur Assmt. Cicle, Chennai - [2003] 133 STC 163 (TNTST) Issues Involved:1. Jurisdiction to impose penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959.2. Compliance with section 16-C of the Tamil Nadu General Sales Tax Act regarding the filing of returns and payment of differential tax.3. Validity of the penalty imposed for delayed filing of returns and payment of differential tax.Issue-wise Detailed Analysis:1. Jurisdiction to impose penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959:The primary issue in all petitions was whether the respondent had the jurisdiction to impose a penalty under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959. The petitioner argued that the respondent lacked jurisdiction to impose such penalties under the specific facts and circumstances of the case. The Tribunal found that section 16-C of the Tamil Nadu General Sales Tax Act, which deals with the reassessment of tax due to price variations, does not provide for the imposition of penalties. The Tribunal noted that while other sections of the Act explicitly provide for penalties, section 16-C does not, indicating a deliberate omission by the Legislature. Therefore, the Tribunal concluded that the authorities had no power to impose a penalty under section 16-C, and thus, invoking section 12(5)(iii) was not justified.2. Compliance with section 16-C of the Tamil Nadu General Sales Tax Act regarding the filing of returns and payment of differential tax:The petitioners, engaged in the manufacture of Indian made foreign liquor, had been filing returns and paying taxes regularly. However, due to an increase in excise duty and vend fee as per G.O. Ms. No. 246 dated February 18, 1989, the petitioners sought reimbursement from the Tamil Nadu State Marketing Corporation Limited (TASMAC). When TASMAC rejected the request, the petitioners showed the excise duty as a rebate in their returns. The Tribunal noted that the petitioners received the differential price ordered by the Government on July 29, 1992, and subsequently filed revised returns on September 25, 1992. The Tribunal found that the petitioners had technically delayed filing the returns and paying the tax under section 16-C by a few months. However, the Tribunal emphasized that the lack of provision for penalties under section 16-C meant that the authorities could not impose penalties for this delay.3. Validity of the penalty imposed for delayed filing of returns and payment of differential tax:The Tribunal examined the validity of the penalties imposed for the delayed filing of returns and payment of differential tax. The authorities had argued that the petitioners should have filed the returns and paid the tax by April 30, 1992, as per section 16-C. The authorities imposed a penalty under section 12(5)(iii) for the delay. However, the Tribunal found that section 16-C does not include any provision for penalties, and the authorities had already exhausted their power to impose penalties under section 12(5)(iii) for the respective assessment years. The Tribunal rejected the reasoning of the authorities, stating that the penalty provisions of section 12(5)(iii) could not be applied to reassessments under section 16-C. Consequently, the Tribunal held that the imposition of penalties was not valid.Conclusion:The Tribunal allowed all the petitions, concluding that the respondent had no jurisdiction to impose penalties under section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959, for the delayed filing of returns and payment of differential tax under section 16-C. The Tribunal emphasized that the lack of penalty provisions in section 16-C was a deliberate legislative omission, and thus, the authorities could not impose penalties for the delay. Consequently, the Tribunal quashed the penalties imposed and ordered that the judgment be observed and executed by all concerned. The petitions were allowed without any order as to costs.