TaxTMI 
TaxTMI 
2018 (4) TMI 1219
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....2000, is extracted hereunder:- "I heard the arguments of both the Representatives and also verified the records produced before me. The only issue to be decided in these appeals is the levy of penalty under sec.16 (2) of the TNGST Act. The contention of the appellants is that the liability on the sales of special import licence is not yet a settled issue and that under bonafide belief only they have not reported this turnover. They have also claimed that they had paid the tax due on being pointed out about the tax liability by the inspecting officials. They have claimed for this turnover was shown in the profit and loss account and verified by the assessing authority. Hence there is no wilful non-disclosure of any taxable turnover warranting the levy of penalty. They has claimed that as per section 16(2) of the TNGST Act wilful non-disclosure must be proved before levying this penalty. Since there is no turnvoer dehors the accounts they claimed that the penlaty levied is the availability of the turnover in their accounts. He has mainly stated that they have not reported this turnover in the monthly returns knowing fully well that they have to pay tax on the same. But for the insp....
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.... the deletion of penalty of Rs. 1,30,993/-, under Section 16(2) r/w. Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959, for the year 1993 94. Vide Order, dated 18.10.2001, the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore, dismissed the same, as hereunder: "5. We have heard the arguments of both the sides and perused the connected material records. The learned Additional State Representative argued that penalty could be levied after 1992-93 relying on 94 STC 139. The learned Authorised Representative for the Respondent in the cross objection has stated that the decision referred by the appellant could be made applicable only in cases where the dealers have wilfully not disclosed the turnover to the department, where such turnover is not reflected in the books of accounts of the decision and not presented to the perusal of the Assessing Officer. But in the case on hand there was no such case of 'wilful non-disclosure' and such turnover was very much available in the books of accounts which was verified by the Assessing Officer who has signed and sealed in the trading and profit and loss account. 6. The learned Authorised Representati....
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....n to impose the penalty. The respondent have produced the accounts which was seen and sealed by authority, the turnover was very much available in the books of accounts. In the case of Vikas Sales Corporation reported in 102 STC 106, the Supreme Court decided in on 1.5.96 holding that the import licences and exin scrips are liable to tax and till then, there was a doubt regarding the tax liability on the turnover. 7. The learned counsel for the appellants attracted our attention to the decision of the Supreme Court in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes reported in 102 STC 106, in which it is stated as under:- "Firstly, it is not brought to our notice that any declaration has been made by the Central Government to the effect that these licences/scrips are can only be fore the period subsequent to the coming into force of the said Amendment, dt, i.e. subsequent to January 30, 1992. All the cases before us pertain to the period earlier to the said date. In this view of the matter, it is not necessary to pursue this argument further". 8. The learned counsel would state that because of this observation, the taxability of Special Import Licences....
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....deliberately in defiance of law or that their conduct was dishonest or they had acted in conscious disregard of their obligation under the Sales Tax Act. The Sales Tax authorities were, therefore, wrong in passing the orders of penalty and upholding the same. The High Court also, in our opinion, committed an error in upholding the orders of penalty. In the result, these appeals are partly allowed. The order of the High Court and the orders of the sales tax authorities imposing the upholding levy of penalty are set aside. Only to that extent the appellants succeed and their appeals are allowed. The judgment of the High court in respect to the planting subsidy and transport subsidy is upheld. In facts and circumstances of the case, there shall be no order as to costs". 11. This decision of the Supreme Court is applicable to the case of the respondent and therefore we are to give a finding that there was no wilful non-disclosure of the taxable turnover in the returns and therefore the levy of penalty could not be sustain under Section 16(2) of the TNGST Act. In the stated circumstances, the order of the Appellate Assistant Commissioner does not call for any interference. To conclu....
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....he assessing officer imposed the penalty, inasmuch as the dealers have not reported the above turnover and paid tax as prescribed under the Act, which amounts to filing of incorrect and incomplete returns and hence, the assessment made falls under Section 12(2) and consequently, the penalty under Section 16(2) read with Section 12(3), is automatic. 13. Learned Additional Government Pleader (Taxes) for the petitioner submitted that the Tribunal has failed to follow the decision of this Court in W.A.No.1013/97, dated 30.04.1998 and the decision of the Hon'ble Supreme Court of India in India Piston Ltd's case [Civil Appeal No.360/93, dated 13.01.98] has held that, "the appellant had filed at the time of assessment a statement showing correct taxable turnover but IDI not pay tax due. It was in this circumstance that penalty was levied and its imposition cannot be set aside". The above principles squarely apply to the case on hand. 14. Heard the learned counsel appearing for the parties and perused the materials available on record. 15. Section 12(3)(b) of the Act deals with, submission of incorrect or incomplete return and for the purpose of levy of penalty, under Clause....
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....dgment assessment has to be on an estimate which the assessing authority has to make not capriciously but on settled and recognised principles of justice. An element of guess-work is bound to be present in best judgment assessment but it must have a reasonable nexus to the available material and the circumstances of each case: [see State of Kerala Vs. C.Velukutty {(1966) 17 STC 465 (sc)}. Where account books are accepted along with other records, there can be no ground for making a best judgment assessment. 6. The law so declared that the best judgment assessment is based on an estimate and is not one based solely on the account books was reiterated by the Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs. H.M.Esufali H.M.ABDULALI {(1973) 32 stc 77}. 7. Though other sub-Sections of Section 12 were amended by the State Legislature subsequent to the date of the judgment in the case of Jayaraj Nadar & Sons {(1971) 28 STC 700 (SC), Sections 12 (1) and 12 (2) have remained in the same form. The legislative intention therefore, except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of p....