2009 (7) TMI 1180 - HC - VAT and Sales Tax

High Court rules penalty under Tamil Nadu Sales Tax Act not applicable if assessment based on assessee's accounts

The High Court upheld the Tribunal's decision in a case concerning a penalty imposed under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959. ... - Issues: Assessment order, penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959.Assessment Order:The assessing authority levied a penalty of Rs. 43,988 under section 12(3) and confirmed a turnover of Rs. 5,10,000 for the financial year 1994-95. The assessee appealed to the Appellate Assistant Commissioner, who upheld the order. The assessee then appealed to the Sales Tax Appellate Tribunal, disputing both the turnover and the penalty. The Tribunal confirmed the turnover but focused on the penalty issue, stating that if the assessment was made under section 12(1) based on the accounts produced by the assessee, the penalty under section 12(3) cannot be imposed.Penalty under Section 12(3) of the Act:The Tribunal, referencing the decision in Appollo Saline Pharmaceuticals (P) Ltd. v. Commercial Tax Officer, held that penalty under section 12(3) cannot be imposed if the assessment was completed under section 12(1) based on the accounts provided by the assessee. The court emphasized that the legislative intention was to permit the levy of penalty only in cases of best judgment assessments made on estimates, not solely relying on the accounts furnished by the assessee. The Tribunal, following this ruling, set aside the penalty imposed under section 12(3) of the Act.Conclusion:The High Court found no reason to interfere with the Tribunal's decision, stating that the ruling in Appollo Saline Pharmaceuticals case applied to the present case. It was concluded that no question of law, let alone a substantial question of law, arose for revision, and the revision petition was dismissed without costs.