Burden of proving non-tax collection upheld as dealer's failure to produce records sustained penalty for excess collection
Penalty for unauthorised tax collection was sustained where the dealer failed to produce the records called for, did not effectively answer the show-cause notice, and did not discharge the burden of proving that the amounts collected were not excess tax. The assessing authority was entitled to draw an adverse inference and compute the excess collection on the basis of available sale and purchase materials. A remand plea was not entertained in revision because the revisional jurisdiction under Section 38 was limited to questions of law wrongly decided or omitted. The Tribunal's view that the earlier appellate order was perverse was upheld, and the penalty determinations remained undisturbed.
Issues: Whether penalty under Section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 and consequential penalty under Section 16(2) of the same Act were justified.
Analysis: The Petitioner failed to produce the records called for despite notice and sufficient time, and also did not respond effectively to the show-cause process. In those circumstances, the assessing authority was justified in drawing an adverse inference and adopting a formula based on the available sale and purchase materials to work out the excess collection. The burden remained on the Petitioner to establish that the amounts collected were not tax collected in excess, but that burden was not discharged. The Court also held that the plea for remand could not be entertained in revision under Section 38, since the revisional jurisdiction was confined to deciding whether a question of law had been erroneously decided or omitted. On the facts, the Tribunal was in treating the earlier appellate order as perverse and in sustaining the penalty.
Conclusion: The levy of penalty was upheld and the challenge failed.
Final Conclusion: No substantial question of law arose, and the revisions were dismissed with the penalty determinations left undisturbed.
Ratio Decidendi: Where a dealer fails to produce relevant records and does not discharge the burden of proving that the collected amounts were not excess tax collection, the assessing authority may draw an adverse inference and sustain penalty for unauthorised collection under the sales tax law.
TaxTMI 
AI Drafter ✕
TaxTMI 
