TaxTMI 
TaxTMI 
2018 (2) TMI 198
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....file of the Deputy Commercial Tax Officer, Park Town-II Assessment Circle, Chennai. On 17.06.2013, their place of business was inspected by the officers of the Enforcement Wing. It was discovered that the assessee, after purchasing CR sheets directly from inter-state supplier for Rs. 4,39,17,794/- during the year 2002-03, had wrongly shown them in their books of accounts, as local purchases and claimed exemption from tax, as second sales. Apart from this, physical stock verification also revealed stock difference of Rs. 5,61,964/-. On account of the above discrepancies, the assessing officer finalized the accounts of the respondent for the year 2002-2003, by levying tax, on the turnover of Rs. 5,08,90,168.67 at 4% and also by levying penalt....
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.... erred in not taking note of the amendment made to sub-section (3) of Section 13 of the Tamil Nadu General Sales Tax Act 1959 by Tamil Nadu Act 22 of 2002, and thereby penalty is leviable to the assessment made either under sub-section (1) or under sub-section (2) of the Act. The Tribunal, therefore, ought not to have relied upon the decisions reported in 28 STC 700 and 125 STC 505 which were relevant only to the period, prior to the amendment made by Tamil Nadu Act 22 of 2002. 6. Learned Additional Government Pleader (Taxes) further submitted that the Tribunal has failed to take note that, subsequent to the said amendment, the question whether assessment was made, as best of judgment assessment or as acceptance of the accounts, becomes ....
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....vely." 9. The Assessing Officer ordered penalty, as hereunder:- "But for inspection, the dealers would not have paid the tax. Hence penalty is called for. I therefore, levy a penalty of Rs. 27,67,621.00 at 150% of the tax due on the actual suppression of Rs. 4,61,27,012.00 form 54 notice will issue. The dealers continue to pay tax under Rule 18 for 2003-2004." 10. After considering the decision of the Hon'ble Supreme Court, in State of Madras Vs. S.G.Jeyaraj Nadar and sons, reported in 26 STC 700 and other decision of this Hon'ble Court in TVl. Apollo Saline Pharmaceuticals Private Limited Vs. Commercial Tax Officer (Fac) and Others, reported in 125 STC 505, the Appellate Assistant Commissioner (CT) - I, Chen....
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....ly, the above State appeal fails and the same is ordered to be dismissed. 12. Though, Mr.S.Kanmani Annamalai, learned Additional Government Pleader (Taxes), made submissions, in support of the above said substantial question of law, this Court is not inclined to accept the same, in the light of the decisions of the Hon'ble Supreme Court and High Court, stated supra. 13. In State of Madras Vs. S.G.Jeyaraj Nadar and sons, reported in 26 STC 700, in the Hon'ble Supreme Court, observed as hereunder:- The question whether penalty can be levied while making the assessment under sub-section (2) of the above section merely because an incorrect return has been filed. The High Court was of the view that it is only if the Assessment h....
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....n respect of both these items were based on the assesss account books. It has almost been conceded on behalf of the revenue before us that the determination of the turnovers relating to the aforesaid two items was made from the entries in the books of account of the assessee. The true position, therefore, was that certain items which has not been included in the turnover shown in the returns filed by the assessee were discovered from his own account books and the assessing authority included those items in his total turnover. For these reasons the High Court was justified in holding that the Assessment of the first and the third items could not be regarded as based on best judgment. The penalty thus could not be levied in respect of those t....