TaxTMI 
TaxTMI 
TaxTMI 
1991 (7) TMI 301
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....g mills carrying on business in Alangudi; (3) that the purchasers of groundnut kernel from the agriculturists were oil mill owners; (4) that the assessees got themselves registered as dealers under directions of the Commercial Tax Officers, even though they were only decorticating millers; (5) that it was at the instance of the commercial tax authorities that the decorticating millers had collected the sales tax from the purchasing oil millers, to be remitted to the Government on behalf of the purchasing merchants, for facilitating recovery of sales tax by the Revenue; (6) that the tax so collected by the assessees from the purchasers was not retained by the assessees and was, in fact, remitted to the Government; (7) that the assessees as well as the purchasing merchants had given petitions, in writing, to the authorities that the tax had been collected and remitted by the assessees, on behalf of the purchasing merchants and should be adjusted against the tax due from the purchasing merchants; (8) that the assessees had also furnished to the sales tax authorities a list of the purchasing merchants together with their registration numbers and the amount of tax collected for a....
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....se upon him by way of penalty a sum not exceeding one and a half times such amount: Provided that no proceedings under this sub-section shall be commenced after a period of five years from the expiry of the year in which the amount has been collected: Provided further that no prosecution for an offence under subsection (1-A) of section 45 shall be instituted in respect of the same facts on which a penalty has been imposed under this sub-section." 5.. From a perusal of the aforesaid provisions, it becomes apparent that the penalty may be levied by the authorities under section 22(2) of the Act, after giving the affected party a reasonable opportunity of being heard by an order in writing, where there has been a contravention of the provisions of sub-section (1), implying thereby that any amount has been collected, by way of tax or purporting to be by way of tax under the Act by a person including a registered dealer, except in accordance with the provisions of the Tamil Nadu General Sales Tax Act and the Rules framed thereunder. 6.. In the facts as noticed above, can it be said that the assessees had "collected" any amount by way of tax or purporting to be by way of tax under th....
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....d" or "collected and kept as his", to attract the penalty of forfeiture. Thus, the circumstances under which the tax was "received" have to be considered by the authorities before imposing the penalty. 7.. From the facts as noticed in the earlier part of this judgment, it would be seen that all that the assessees in the present case had done was to "receive" the tax due from the purchasing merchants who are the first purchasers and liable to pay the sales tax and remit it to the Government and that too, at the asking of the sales tax authorities. The sales tax collected was not retained by the assessees, but on the other hand, it was faithfully remitted to the Government to the account of the purchasing merchants as per the list furnished to the department. It has been the consistent case of the assessees, and it is not disputed by the Revenue at any point of time, that they collected the tax due from the purchasing merchants at the asking of the sales tax authorities only. The assessees had, both in the reply to the notice sent to them as well as in the grounds of appeal before the appellate authority maintained that it was at the instance of the Revenue only that the assessees g....
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....der the facts and circumstances of each case and determine whether or not penalty should be levied and if so, the extent of that penalty. The section fixes the maximum limit of penalty as one and a half times the amount. 9.. In State of Tamil Nadu v. Selvakumar Timber Traders [1984] 57 STC 69 (Mad.), the assessing authority had levied a penalty for violation of section 22(1) of the Act. The Appellate Assistant Commissioner, in appeal, had reduced the quantum of the penalty. The Tribunal considered the second appeal of the assessees as well as the department's enhancement petition asking for the restoration of the penalty as originally levied by the assessing authority and held that there was no case for restoration of penalty, as levied by the assessing authority and that the Appellate Assistant Commissioner was justified in reducing the quantum of penalty. The enhancement petition of the State was accordingly dismissed. The High Court upheld the order of the Tribunal and dismissed the revision petition filed by the Revenue. 10.. Again, in State of Tamil Nadu v. Sasman and Company [1984] 57 STC 160 (Mad.), it was found that where there was a mutual mistake on the part of the asse....