TaxTMI 
TaxTMI 
2009 (8) TMI 1095
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....11, 1991 resulted in recovery of 29 slips and 5 slips secured from the head office at Mayiladuthurai. Thereafter, in order to get the records verified with the accounts of the assessee, summons were issued on various dates by the Enforcement Wing Officials, but the assessee did not produce the accounts. In the meantime, the assessee filed W. P. No. 12614 of 1991 and based on the order dated October 1, 1991 passed by this court, 29 items of records were returned to the assessee with instructions to re-submit the same as and when called for by the Department. Subsequently, the assessee appeared for an enquiry on November 18, 1992. During the course of enquiry, statement of the assessee was also recorded by the Enforcement Wing Officials and copies of such statements recorded were handed over to the assessee. Ultimately, based on the report of the Enforcement Wing Officials, the Commercial Tax Officer passed a revised order of assessment in which the suppression was noticed as under: Purchase suppression detected Rs. 21,35,910.00 Add: Expenses as per slip AP 16/15.5.89 Rs. 20,000.00 Rs. 21,55,910.00 Add: Gross profit 9.73 per cent as per books Rs. 2,09,7....
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....purchase value originally reported Rs. 1,86,09,925 Net purchase value subsequently reported Rs. 1,93,63,827 Difference Therefore, the Appellate Assistant Commissioner added 50 per cent of the difference of Rs. 7,53,902 as taxable turnover by adding 9.73 per cent gross profit and refixed the turnover at Rs. 4,73,788. So far as penalty is concerned, the Appellate Assistant Commissioner found there was wilful suppression to the extent of Rs. 30,080 which is considered for levy of tax at Rs. 7,53,902 100 per cent of the tax, surcharge and additional sales tax under section 16(2) of the TNGST Act and refixed at Rs. 2,406. In so far as Appeal No. 393 of 1995, the Appellate Assistant Commissioner gave benefit of doubt to the assessee by treating the sale made at Madras beyond the balance of surcharge and additional surcharge levied in the revision of assessment for 1989-90 is held to be sustained at Rs. 39,593. Similarly, the penalty levied was refixed by the Appellate Assistant Commissioner at 50 per cent as already levied and fine at Rs. 59,390. To sum up, the Appellate Assistant Commissioner has granted the relief as under: Tax SC ST Penalty ....
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....the levy of penalty at 150 per cent. Such enhancement of punishment, as he would call, by the Tribunal is not in accordance with law. The learned counsel would further contend that the imposition of additional sales tax and surcharge is not sustainable. To effectively adjudicate upon the issues involved in this appeal, certain facts are required to be mentioned. The assessee originally filed a return reporting a total and taxable turnover of Rs. 1,21,40,395.85 and Rs. 82,48,579, respectively in form A1 for the year ending March 31, 1990 and the same was ordered by the assessing officer by order dated November 30, 1990. Subsequently, the places of business of the assessee were inspected by the enforcement officials and during the course of search, records such as files, bill books were, etc., recovered. Thereafter, a notice was issued to the assessee to produce the books of accounts. The assessee, instead of producing the books of accounts has filed a writ petition before this court in W.P. No. 12614 of 1991 praying to direct the authorities to return 29 items recovered during the search and the same was also ordered by this court on October 1, 1991. Subsequently, the assessee....
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....y of tax on the sale value of Rs. 8,27,257 by adding gross profit of 9.73 per cent to the net purchase value at Rs. 7,53,902. The Tribunal also rightly found that but for the recovery of records during the inspection and house search, the actual suppression might not have been disclosed by the assessee. In such view of the matter, the Tribunal deemed it fit to impose maximum penalty of 150 per cent as the same is warranted in the facts and circumstance of the case. The Tribunal also found that the gross profit of 5.43 per cent in respect of first sales is unbelievably low as it clearly indicated the misclassification of first sales as second sales. It was also found by the Tribunal that the Appellate Assistant Commissioner having observed that there has been misclassification of taxable first sales and non-taxable second sales, ought to have adopted the formula to restrict the second exemption claimed by the assessee or estimated the first sales by adding gross profit of 9.73 per cent to the net purchase value or at least made the equal further addition to the actual first sales suppression of Rs. 8,27,257. The Tribunal therefore held that the scribbled figures of first purchase fu....