Penalty for excess tax collection sustained on belated credit notes; Tribunal could examine the entire appellate penalty order.

Penalty for excess tax collection under section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 was sustained where the assessee relied only on belated credit notes to claim repayment, but produced no supporting material from customers and failed to displace the finding that the excess collection remained unexplained. The Tribunal was also competent to examine the entire penalty order once the adverse part of the appellate order was carried before it, because an appeal to the Tribunal opens the whole controversy arising from the order under challenge. The revision therefore failed.

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Issues: (i) whether penalty was exigible under section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 for collection of excess tax, and (ii) whether the Tribunal could examine and sustain the entire penalty even though part of the Appellate Assistant Commissioner's order had been remanded.

Issue (i): Whether penalty was exigible under section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 for collection of excess tax.

Analysis: The assessee had collected tax beyond the permissible rate and sought to rely on credit notes to show repayment of the excess collection. The credit notes were issued long after the relevant transactions and after the final assessment order, and the Tribunal found them to be created only to avoid penalty. The assessee also failed to produce supporting material from the customers who were said to have received repayment. The factual finding that the excess collection remained unexplained was not displaced.

Conclusion: Penalty under section 22(2) was rightly upheld and the finding was against the assessee.

Issue (ii): Whether the Tribunal could examine and sustain the entire penalty even though part of the Appellate Assistant Commissioner's order had been remanded.

Analysis: Once the assessee carried the adverse part of the appellate order before the Tribunal, the entire order became open to scrutiny. The Tribunal was therefore entitled to examine the penalty in its entirety, including the portion linked to the remanded amount. The decision relied on the principle that an appeal to the Tribunal opens the whole controversy arising from the order under challenge.

Conclusion: The Tribunal was competent to consider the entire penalty and its approach was upheld.

Final Conclusion: The revision failed because the excess tax collection was not shown to have been genuinely repaid and the Tribunal was entitled to examine the complete penalty order.

Ratio Decidendi: Where excess tax collection is supported only by belated and unsubstantiated credit notes, penalty may be sustained, and an appeal to the Tribunal opens the entire appellate order to scrutiny.

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