TaxTMI 
TaxTMI 
2018 (4) TMI 373
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 12(3) of the Act. 3. Aggrieved over the assessment, the dealer, filed an appeal before the Appellate Assistant Commissioner (CT)-II, Chennai, disputing the turnover of Rs. 57,55,528/- and levy of penalty of Rs. 15,604/-, under Section 12(3)(b) of the Act. The Appellate Assistant Commissioner, vide order, dated 29.01.2003, dismissed the appeal, as follows: "4. I have heard the arguments of Authorized Representative and Departmental Representative and perused the connected records. At the time of hearing, the Authorised Representative has reiterated the points raised in the grounds of appeal. The Departmental Representative who appeared on behalf of the Revenue has stated that the appellants have already arrived at the stock difference on the basis of the inspection and also added equal addition for probable omissions and as such the addition of Rs. 1,15,072/- has to be sustained besides the levy of penalty, as the appellant had willfully suppressed the turnover. But for inspection, the same could not be revealed. 5. The argument of both sides were considered and found that the inspecting officers had arrived at the stock difference of Rs. 52,306/- at the time o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication of G.O.Ms.200 there is no material found in the records that the stock difference available at the time of inspection is below 2% when, compared to the actual stock available at that time. There is no force in the arguments of the appellant regarding the difference of turnover of Rs. 10,470/-. So we feel that there is no error in sustaining the turnover assessed by the Assessing Officer and also there is no error in sustaining the equal time addition also. Regarding the 12(3)(b) penalty, it is found that all the figures were taken from the appellants books of accounts, so there is no omission on the part of the appellants. In such condition the levy of penalty will not arise under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959. So, we hereby ordered to set aside the penalty which was levied under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959. In fine, the Tribunal Appeal is partly dismissed and partly allowed." 5. Being aggrieved, the State has preferred the instant Tax Case Revision. 6. Mr.V.Haribabu, learned Additional Government Pleader (Taxes) submitted that the Tribunal, ought to have seen that the Assessing Officer had l....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... {(1971) 28 STC 700, at page 701, after extracting Section 12 (2) of the Tamil Nadu General Sales Tax Act, 1959, which remains in the same form even now, observed thus:- "The question is 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 has to be made to the best of the judgment of the assessing authority that penalty can be levied. It seems to us that the High Court came to the correct conclusion because sub-sections (2) and (3) have to be read together. Sub-Section (2) empowers the assessing authority to assess the dealer to the best of its judgment in two events: (i). if no return has been submitted by the dealer under sub-section (1) within the prescribed period, and (ii). If the return submitted by him appears to be incomplete or incorrect. Sub-Section (3) empowers the assessing authority to levy the penalty only when it makes an assessment under sub-Section (2). In other words, when the assessing authority has made the assessment to the best of its judgment, it can levy a penalty. It is well known that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....les Tax Act, 1959 would not arise. The Explanation to section 12(3)(b) of the Act specifies the turnover which merited to be excluded for the purpose of levy of penalty, one such being the turnover representing addition related to book turnover itself. Thus, even while calculating the turnover for the purpose of levy of penalty, the turnover, which are already available in the books of accounts are to be excluded and only those turnover which are estimated having reference to a specific concealment alone, the purpose of addition, invite the penal provisions under the Tamil Nadu General Sales Tax Act, 1959. In the decision reported in [2002] 125 STC 505 (Mad) (Appollo Saline Pharmaceuticals (P) Limited v. Commercial Tax Officer (FAC)) this court pointed out that when the assessment is based on the accounts turnover, the question of levy of penalty does not arise." 9. In the circumstances, applying the said decision reported in [2002] 125 STC 505 (Mad) (Appollo Saline Pharmaceuticals (P) Limited v. Commercial Tax Officer (FAC)) and the Explanation to section12(3)(b) of the Tamil Nadu General Sales Tax Act, the order of the Sales Tax Appellate Tribunal in levying penalty unde....