TaxTMI 
TaxTMI 
2018 (3) TMI 819
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....ant Commissioner (CT) Nungambakkam, Assessment Circle. He is also a dealer registered under the Central Sales Tax Act, 1956. In the course of business, the assessing officer, issued notice, under Section 27 of the Act, which applies to "assessment of escaped turnover and wrong availment of input tax credit". He also proposed to impose penalty, u/s.27(4) of the Act. The petitioner has filed objections to the effect that when the entire ITC amount availed was paid, at the time of VAT Audit, on 28/08/2010, the notice for revision of assessment is without jurisdiction and has to be dropped, moreso, with regard to penalty u/s.27(4), since there being no wrong availment of ITC nor any escaped turnover to invoke sec.27 of the Act. However, the assessing officer rejected the objections and confirmed the proposal vide order dated 20/01/2012. 4. As against the order dated 20/01/2012 appeal was filed before the Appellate Deputy Commissioner contending the reversal of ITC along with penalty was erroneous. The Appellate Deputy Commissioner deleted the penalty. As against the order of the Appellate Deputy Commissioner, the respondent filed appeals before the Tribunal. 5. On 16/12/17, the a....
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....eply vide their letter dated 18.01.2012 and replied that in respect of reversal of Input Tax Credit of Rs. 65,305/-, it has been accepted by the dealer and paid by them on 28.08.2010 at the time of VAT audit. But for VAT audit the wrong claim of Input Tax Credit could not be come out. Hence the Assessing Officer correctly reversed the Input Tax Credit. The Assessing Authority in addition to the tax automatically levied penalty for wrong availment of Input Tax Credit. Hence the Assessing Officer rightly levied penalty under Section 27(4) and the same is in order and sustained. Accordingly the order of the first appellate authority deserves to be set aside. The Tribunal therefore set aside the impugned order of the first Appellate Authority dated 03.06.2013 and upheld the orders of the Assessing Officer and allow the STA in favour to the Revenue. In the result STA 251/2014 stands Allowed." 8. Being aggrieved by the same, instant Tax Case Revision Petition Nos.10 to 12 of 2018 have been filed, on the following substantial questions of law:- "(i) Whether the order of the Tribunal in allowing the Appeal in favour of the respondent is correct in the eye of l....
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....he orders impugned. 11. Opposing the same, Mr.V.Haribabu, learned Additional Government Pleader (Taxes) submitted that but for the inspection, suppression of tax, and reversal of input credit, would not have come to light and that therefore, there was no error in imposing penalty, under Section 27 (4) of the Tamil Nadu VAT Act, 2006. He further stated that there is no error, in the order of both of the assessing and appellate authorities. For the above said reason, he prayed that the order of the assessing authority requires to be restored. 12. Heard the learned counsel for the parties and perused the materials available on record. 13. Before adverting to the rival contentions, let us have a cursory look at the provisions of Tamil Nadu VAT, 2006. Section 64. Maintenance of up-to-date, true and correct accounts and records by dealers- (1) Every person registered under this Act, every dealer liable to get himself registered under this Act, and every other dealer who is required so to do by the prescribed authority by notice served in the prescribed manner, shall keep and maintain an up-to-date, true and correct account showing full and complete particulars ....
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....eck or verify the stock which may be found therein; and (iii) to furnish such information as he may require as to any matter which may be useful for or relevant to any proceedings under this Act. (b) The officer conducting the audit shall on no account remove or cause to be removed any books of accounts, other documents or stock. 14. Perusal of the orders, dated 20/1/2012, of the Assistant Commissioner (CT), Nungambakkam Assessment Circle, for the assessment years 2008 2009, 2006 - 2007 and 2007 2008, shows that Ergomaxx (India) Private Limited, Chennai, the dealer in furniture, at No.80, Nungambakkam High Road, were assessed on the total and taxable turnover, under self-assessment for the assessment years 2008 2009, 2006 - 2007 and 2007 2008. Business was audited by the Enforcement Wing Officials, for the period from 1/4/2008 to 31/3/2009, 1/1/2007 to 31/3/2007 and 1/4/2007 to 31/3/2008, respectively. During the course of audit, ITC accounts were scrutinised and certain defects were notice, for which a revision notice, dated 16/12/2011, has been issued for the above said period. However, even before finalisation of reassessment, the dealer has paid the tax and....
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....after making such enquiries as it may consider necessary, assess the dealer to the best of its judgment, subject to such conditions as may be prescribed, after the completion of that year: Provided that before taking action under this sub-section, the dealer shall be given a reasonable opportunity of being heard. (5) In addition to the tax assessed under sub-section (4), the assessing authority shall, in the order of assessment passed under sub-section (4) or by a separate order, direct the dealer to pay by way of penalty, a sum which shall be, one hundred and fifty percent of the difference of the tax assessed and the tax already paid as per the returns: Provided that no penalty under this sub-section shall be imposed after the period of six years from the date of assessment order * unless the dealer affected has had a reasonable opportunity of showing cause against such imposition. Explanation. For the purpose of levy of penalty under this sub-section, the tax assessed on the following kinds of turnover shall be deducted from the tax assessed under sub-section (4):-- (i) Any turnover representing additions to the turnover as per the returns made by the ....
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....the amount of tax on the basis of the cancelled assessment has already been collected and if the amount of tax arrived at as a result of the fresh assessment is different from it, any amount over paid by the dealer shall be refunded to him without interest, or the further amount of tax, if any, due from him shall be collected in accordance with the provisions of this Act, as the case may be. (c) Penalty, if any, imposed and collected under sub-section (5), shall be refunded to the dealer without interest on cancellation of the order of original assessment 16. Section 27 speaks about the Assessment of escaped turnover and wrong availment or input tax credit. As per sub-Section 1 of Section 27, (a) Where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, the assessing authority may, subject to the provisions of sub-section (3), at any time within a period of [six years from the date of assessment], determine to the best of its judgment the turnover which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary. (b) Where, for any reason, the whole or....
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....ined with connected records and found acceptable. In view of the above, Penalty Levied under Section 27(4) Rs. 32,653/- is set aside. In fine, the Appeal stands Allowed." 19. When the correctness of the orders made by the Appellate Deputy Commissioner (CT) - 3, Chennai, were challenged, in S.T.A.Nos.250 to 252 of 2014, upon hearing the learned counsel for the parties, the Tribunal, reversed the issue in favour of the revenue. 20. In Chennai Textile Chemicals Private Ltd., Vs. State of Tamil Nadu and Another, reported in 107, a Hon'ble Division Bench of this Court, at paragraph No.21, held as follows:- "Even though in a given case or more than one case, the quantum of turnover suppressed or the tax sought to be avoided also, at times, may be one and the same, if the particular assessee, at the time of final assessment, found to have otherwise paid any amount already before such final assessment, sufficient to go to reduce the tax liability ultimately determined, the imposition of penalty to that extent is reduced. This again, in our view, proceeds upon an intelligible differentia or reasonable basis of classification that the State has not ultimately lost....
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....ion to the order of the AAC (CT), learned Special Government Pleader submitted that if the presentation of cheque No.697629 on January 7, 1998 is true, then the petitioner could have pointed out the same before the assessing officer. It was further submitted that as seen from the assessment order and the order of the AAC (CT), the petitioner has not produced any material to show that cheque was presented prior to passing of the order. 7. In the typed set of papers, the letter of the petitioner, dated January 7, 1998 enclosing cheque No.697629 dated January 7, 1998 for Rs. 14,905 has been filed. Before us, the learned counsel for the petitioner has also produced bank statement of accounts of the petitioner indicating encashment of cheque No.697629 for Rs. 14,905 on January 10, 1998. As per the assessment order, January 8, 1998, the balance tax payable was only Rs. 10,332/- whereas even on January 7, 1998, the petitioner has given cheque bearing No.697629 for Rs. 14,905. Even though the cheque for Rs. 14,905 was encashed on January 10, 1998, it relates back to the date of cheque. In Chennai Textile Chemicals Private Ltd., Vs. State of Tamil Nadu {(2002) 125 STC 107,....