2009 (6) TMI 956

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....J.--The correctness of the order of the Sales Tax Appellate Tribunal confirming the order of the assessing officer levying tax in respect of the turnover of lease rental received by the assessee by leasing its fleet of lorry and imposing penalty for the act of the assessee in not returning that turnover for taxation by setting aside the order of the appellate authority, is assailed in this writ pe....

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....n merits and disposed of the matter in the following manner: The one and only dispute in this case is as to whether certain turnover received by the assessee as lease rental by leasing out a fleet of lorry to its sister concern would come within section 3A of the Tamil Nadu General Sales Tax Act, 1959. Section 3A provides for levy of tax on right to use any goods and which authorised the levy of ....

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.... on record, recorded a finding to the effect that the motor vehicles were maintained by the sister concern and exclusive use by them for their purpose. The assessee had received the amount for such use of the vehicle by the sister concern, namely, Kaveri Bio Proteins (P) Ltd. If the vehicles were exclusively used by other persons bearing all the maintenance charges, then the amount received from t....

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.... including the penalty levied. The learned counsel for the assessee very strenuously contended that the amount received would only tantamount to freight charges and it cannot be regarded as a lease rental under section 3A of the Act. Even assuming for a moment, the amount received on renting out the lorry would attract tax under section 3A of the Act, the levy of penalty is not warranted, becaus....