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TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 601
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....ri.A.Ashok Kumar of Poonamallee for a value of little more than Rs. 1.18Crores for the purpose of supply, filling, spreading, levelling and compacting the project site. The Assessing Officer has levied tax at the rate of 4% on the estimated turnover of Rs. 1,30,81,453/- as the dealer has not paid the tax on the sale value of the goods acquired from Sri.A.Ashok Kumar. A penalty of Rs. 7,84,887/- was also imposed under Section 27[3] of the Tamil Nadu Value Added Tax, 2006 [hereinafter referred to as the Act]. Against this revised order of assessment dated 30.11.2012, the respondent/dealer/assessee preferred an appeal in VAT.No.15 of 2013 before the Appellate Deputy Commissioner [Commercial Tax], who dismissed it on 17.06.2013. The Second Appeal in T.A.No.43 of 2013 then was preferred to the Sales Tax Appellate Tribunal, which by its impugned order dated 14.10.2014 has deleted the penalty levied under Section 27[3] of the Act. Hence, this revision petition by the State. 3. The short question which has engaged our attention was whether the respondent/dealer/assessee, in the given facts and circumstances, is not liable to be imposed the penalty under Sub-section 3 of Section 27 at al....
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....ature of penalty that is liable to be imposed, in the case of The Commissioner of Income-Tax, West Bengal Vs Anwar Ali 1970[2] SCC 185 and held as under : "4. The first point which falls for determination is whether the imposition of penalty is in the nature of a penal provision. The determination of the question of burden of proof will depend largely on the penalty proceedings being penal in nature or being merely meant for imposition of an additional tax, the liability to pay such tax having been designated as penalty under Section 28. One line of argument which has prevailed particularly with the Allahabad High Court in Lal Chand Gopal Das's case [supra] is that there was no essential difference between tax and penalty because the liability for payment of both was imposed as a part of the machinery of assessment and the penalty was merely an additional tax imposed in certain circumstances on account of the assessee's conduct. The justification of this view was founded on certain observations in C.A.Abraham v. Income-tax Officer, Kottayam and Another. It is true that penalty proceedings under Section 28 are included in the expression assessment and the true nature of ....
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....olding that the imposition of penalty was not justified, and they are to have cumulative effect. This does not mean that the earlier reasoning is less important. The observations in the judgment in Ponnusamy Asari v. State of Tamil Nadu [T.C.Nos.451 to 455 of 1969] appeal to us. So also the reasoning in A.V.Meiyappan v. Commissioner of Commercial Taxes. Those observations are in consonance with what the Supreme Court has held in Commissioner of Income-tax, West Bengal v. Anwar Ali. We, therefore, prefer to rest our decision on such reasoning. With great respect, we are not able to agree with the views expressed in Oveekee Textiles v. Deputy Commercial Tax Officer, Madras Metal Works v. State of Madras and Rajam Textiles v. State of Tamil Nadu, when it is said that the process of imposition of penalty is almost an automatic one whenever an estimate is made when it is found that no return has been filed or that the return filed did not indicate the turnover to the extent fixed on the basis of the best judgment basis. All the circumstances of the case will have to be carefully scrutinised and the question whether penalty should be imposed must be considered on the basis of the judicia....
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....le of law that a mere quoting of wrong provision of law or misquoting a provision of law would not vitiate the exercise so long as the power is traceable. In the instant case, Sub-section (3) of Section 27 of the Act clearly refers to the proposed revision of the assessment undertaken under Sub-section (1) of Section 27 of the Act and then authorised imposition of a penalty on a graded scale. As the Pre-revision Notice itself refers to the proposed revision under Sub-section (1) of Section 27 of the Act, the penalty that can become leviable in such a scenario is the one provided under Sub-section (3) of Section 27 of the Act, but not under Sub-section (4) of Section 27 of the Act. Hence the error committed by the assessing officer is a curable one. Since the very purpose of drawing a Pre-Revisional Notice is intended to provide an effective and meaningful opportunity to the dealer/assessee to putforth his defence against the proposed action, the same gets impaired to a certain extent, when an erroneous notice is drawn by the Assessing Officers. 13. It is not in dispute that Sub-Section (3) of Section 27 of the Act has in turn provided for imposition of penalty charges at the rate ....
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....the Assessing Officer to demonstrate as to what percentage of the payment goes towards cost of earth component alone, perhaps there would have been an occasion for the Assessing Officer to analyse carefully and properly the cost components and then arrive at a reasonable finding, as to how much out of the total amount paid would go for the quantity of the earth procured. Thus, the other components towards labour charges or machinery hiring charges could have been worked out simultaneously. But, unfortunately, no such plea was put up in response to the Pre-Revisional Notice. 16. We have grave reservation to subscribe to the view of the Tribunal that the respondent/dealer/assessee is liable to be charged under Section 12 of the Act as he has procured the material from an unregistered dealer. On the other hand, there is much force behind the submission of the respondent dealer that it is a works contract and therefore, Section 5 of the Act is what gets attracted. But, however, we hasten to add that, in the instant case, we are not required to advert to this question inasmuch as this revision petition is confined only to the extent of setting at naught by the Tribunal the penalty im....