2014 (9) TMI 896

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....penalty under Section 27 (3) of the Tamil Nadu Value Added Tax Act in a case of alleged violation of Section 27 (1) (a). 3. It appears that for the assessment year 2011-2012, in the middle of the assessment year, there was a surprise inspection by the officers of the department on 14.7.2011. During the said inspection, it was noticed that there was variation in the stocks to a certain extent and the assessee had not paid taxes due on a specified amount. The assessee, on realising that tax was due on certain turnover for the said period, during the currency of the assessment year, paid the taxes without demur. However, the officer passed an order under Section 27 (3) imposing penalty in terms of Sections 27 (1) (a) and 27 (3) of the Act. ....

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....lue Added Tax Act, 2006 accepting the returns filed by the assessee or under Section 22 (4) of the Act. It is also clear from the order dated 21.3.2013 that the order does not speak about any escaped turnover, from assessment, in the original assessment as envisaged under Section 27 (1) (a) of the Act. It is not in dispute that the assessee had admitted and paid the tax due on the actual suppression at the time of inspection itself. By taking into account the fact that the Assessing Officer had levied penalty under Section 27 (3) of the Act which could be levied while making assessment only under Section 27 91) (a), it should be treated that the impugned assessment order is one passed under Section 27 (1) (a)( of the Act. But, it is well se....

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....n at the time of inspection itself and therefore there was no balance of tax for levying penalty under Section 22 (5) of the Act. In view of the foregoing discussions, we are of the considered view that penalty under Section 27 (3) of Tamil Nadu Value Added Tax Act, 2006 is not sustainable and therefore, we hold that the order of the first appellate authority setting aside the penalty levied under Section 27 (3) is in order and hence no interference is called for. Accordingly, the point is answered against the appellant/State. As against the said order of the Tribunal, which held in favour of the assessee, the present revision has been filed by the Revenue. 4. Heard Mr.Jaya Prathap, learned Addl. Government Pleader (Taxes) appearing ....