TaxTMI 
TaxTMI 
2018 (4) TMI 1297
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.... reasons that the sales of exporter within the State have not supported by proper documents. He also estimated the sales turnover for non-production of 13 taxes of Form XX obtained from the Commercial Tax Officer, Mahal Circular, Madurai at Rs. 14,30,000/-.Thus, he determined the total and taxable turnover at Rs. 18,10,200/-, as against the reported total and taxable turnover at Rs. 20,63,814/- and Rs.Nil respectively. He also levied penalty of Rs. 2,98,683/-, under Section 12(3)(b) of the TNGST Act, 1959, for the shortfall established in tax payment on final assessment. 3. For the year 1995-96, the Assessing Officer, in his original assessment, found at the time of check of accounts that the receipt of granite raising contractor fee, amounting to Rs. 13,25,119/- and commission received amounting to Rs. 4,56,128/-, were not supported by proper documents, viz., agreement, labour charges, bills, cash receipt, etc., and assessed the same to tax at 8%. He further estimated the transactions effected through 100 form XX declarations, out of 105 obtained from the department, amounting to Rs. 82,49,100/-, at 8% to the value of the granite amount, worked out from 5 Form XX declarations r....
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....in the reply given to the pre-assessment notice also they have mentioned that the transactions mentioned in the two form xx delivery notes were relating to the transport of goods effected to Tvl.Shenoy Granites(p) Ltd., Bangalore and these have been accounted for in their books of accounts vide invoice no.16 dated 6.8.96. So we first verified whether the above arguments advanced by the learned Authorised Representative is correct or not? It is found in reply given to the Assessing Officer against the proposal the appellants have taken the same stand. However, it is found from the accounting procedure of the appellants that they are mentioning invoice numbers only in the sales omission. Regarding the further estimation for non-production of form xx, the learned Authorised representative contended that the form xx received from the Assessing Officer was maintained in the remote quarry site and since they have to transport the goods from quarry site the form xx delivery notes were utilised or the goods intended for sale, goods intended for export and also for transporting granites obtained in respect of the raising contract entered intoby them with Tvl.South India Corporation Ltd., Ma....
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....ordingly, we order for the deletion of the above turnovers from assessment. 9. Point (ii): Rs. 17,23,703/- MTA No.720/01 Rs.2,35,960/- MTA No.1067/01 Rs.6,48,708/- MTA No.721/01 The next dispute arises for consideration is the penalty levied by the Assessing Officer and sustained by the learned Appellate Assistant Commissioner. In all these cases, the pre-export sales and eport sales figures are available in the books of accounts but rejected by the lower authorities as not covered by relevant documents and the appellants have suppressed the turnover said to be effected from the non-production of form XX and treating the commission received as sales suppression. As there are no proved suppression or concealment of turnover established by the department, the penalty sustained by the Appellate Assistant Commissioner is quite illegal. Following the judgment of Supreme Court reported in 28 STC 700 in the case of Tvl.S.G.Jayaraj Nadar and Sons, we order for the deletion of penalty sustained by the Appellate Assistant Commissioner. In the result, all the three appeals stand partly remanded and partly allowed." 5. Being aggrieved by the abov....
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....he penalty as levy of penalty under Section 12(3)(b) is not called for in this case. As per the amended provisions of Section 12(3)(b) of the TNGST Act, levy of penalty is automatic and it should be levied when there is balance of tax payable to the government. The Tribunal erred in following the decision reported in 28 STC 200 which has no relevance to the case on hand. The Tribunal has failed to note that the first Appellate Authority had rightly and thoroughly discussed the issue in his order and confirmed the assessment made in this case. Heard the learned counsel for the parties and perused the materials available on record. 11. On the facts and circumstances, the Tribunal has framed the following points for consideration:- "(i) Whether the turnovers of Rs. 18,10,200/- in MTA.No.1067/01, Rs. 1,02,58,177/- in MTA.No.720/01 and Rs. 40,48,942/- in MTA.No.721/01 sustained by the Appellate Assistant Commissioner are justifiable or not? (ii) Whether penalty of Rs. 2,35,950/-, Rs. 17,23,703/- and Rs. 6,48,708/- under Section 12(3)(b) of the Act in MTA Nos.1067/01, 720/01 and 721/01 respectively, sustained by the Appellate Assistant Commissioner is reasonable o....
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....he 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 the best judgment 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....