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2002 Supreme(Mad) 1369
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE N.V.BALALSUBRAMANIAN & THE HONOURABLE MR. JUSTICE K.RAVIRAJA PANDIAN
Uma Metal Industries - Appellant
Versus
The State of Tamil Nadu and Another - Respondents
W.P.No.398 of 2001 and W.M.P.No.509 of 2001
Decided On : 21 November 2002
The main legal point established in the judgment is that the revision of assessment under Section 16 of the T.N.G.S.T. Act is maintainable and warranted, and Sections 12 and 16 of the Act are independent of each other and operate in different circumstances.
Headnote:
Taxation - Assessment of Turnover - Tamil Nadu General Sales Tax Act - Section 16(1)(a) - Summary of Acts and Sections: The court discussed the provisions of Section 16 of the Tamil Nadu General Sales Tax Act, which provides for the revision of assessment if the turnover of a dealer has escaped assessment to tax. The court also referred to Section 16(2), which allows the assessing authority to levy a penalty for wilful non-disclosure of assessable turnover by the dealer.
Fact of the Case:
The petitioner, a dealer in Aluminium circle and vessels, was assessed to tax on a total and taxable turnover for the assessment year 1989-90. The assessing officer proposed to determine the turnover escaped from assessment to tax and levy penalty for wilful failure to disclose the assessable turnover in the return and paid tax due thereon. The petitioner contended that the first seller was a registered dealer and requested to drop the proceedings initiated under Section 16 for re-assessment and for the levy of penalty. The assessing officer rejected the objections and completed the revised assessment under Section 16 by levying tax on the escaped turnover and penalty. The petitioner appealed to the first appellate authority and the Sales Tax Appellate Tribunal, but both confirmed the assessment and reduced the penalty. The petitioner then moved the Taxation Special Tribunal by way of revision, challenging the assessment and penalty.
Finding of the Court:
The court found that the assessing authority had given reasons for the revision of assessment and had provided the petitioner with the necessary materials for the purpose of the revision notice. The court also held that Sections 12 and 16 of the T.N.G.S.T. Act are independent of each other and operate in different circumstances. It rejected the petitioner's argument that the revision of assessment was not maintainable and unwarranted, as the reported turnover was accepted, and only tax was levied on the turnover for which exemption had been claimed and allowed originally. The court also dismissed the petitioner's contention that there was no finding by the authorities that the assessee had wilfully non-disclosed the assessable turnover, as it found factual findings by the authorities that the petitioner had produced bogus bills and failed to establish the genuine and bona fide nature of the transaction.
Issues: The issues in the case revolved around the revision of assessment under Section 16 of the T.N.G.S.T. Act, the maintainability of the revision, the application of Sections 12 and 16, and the wilful non-disclosure of assessable turnover by the dealer.
Ratio Decidendi: The court held that the revision of assessment under Section 16 was maintainable and warranted, as the assessing authority had provided the necessary materials for the purpose of the revision notice. It also found that Sections 12 and 16 of the T.N.G.S.T. Act are independent of each other and operate in different circumstances. The court further held that there were factual findings by the authorities that the petitioner had produced bogus bills and failed to establish the genuine and bona fide nature of the transaction, justifying the revision of assessment and the levy of penalty.
Final Decision: The court dismissed the writ petition, finding no grounds for interference with the orders of the authorities below, and also dismissed the connected W.M.P., with no order as to costs.
K.RAVIRAJA PANDIAN, J.
The writ petition is filed against the order of the Tamil Nadu Taxation Special Tribunal dated 14.6.2000 made in Tax Case Revision No.160 of 2000 on the file of the first respondent.
2. The brief facts of the case are as follows:
The petitioner is a dealer in Aluminium circle and vessels. By original assessment, for the assessment year, 1989-90, the petitioner was assessed to tax on a total and taxable turnover of Rs.17,71,016/- and RS.16,14,447/- respectively under assessment order dated 19.9.1991. That order was carried on appeal to the Appellate Assistant Commissioner, who by his order dated 31.8.1994 in A.P.No.32 of 1993, set aside the assessment and directed the Assessing Officer, the second respondent to pass orders afresh after investigating the matter further and giving an opportunity to the petitioner. After remand, the Assessing Officer issued a revised notice calling upon the petitioner to file objections to the revised notice. In the pre-revision notice, the assessing Officer has stated that the petitioner has availed exemption in respect of a turnover of Aluminium in a sum of Rs.13,45,373/- on the ground the goods suffered tax at the hands of one Mathuram Traders, No.30, Jambulingam Main Road, Madras-82 i.e., second sale exemption at the hands of the petitioner assessee and on enquiry, it was found that the first seller, Mathuram Traders were not doing business and the Registration Certificate was cancelled from 23.8.1989. The said Mathuram Traders were only bill traders and never handled the goods and as such, the turnover shown as purchased from the Mathuram Traders in the petitioner's returns has been the goods purchased from unknown sources. In order to avoid tax, the assessee produced bogus bills in the name of non-existent dealer. The payment in respect of goods by the assessee was also not supported by any evidence. Therefore, the assessing officer proposed to determine under Section 16(1)(a) of the Tamil Nadu General Sales Tax Act, (hereinafter referred to as the Act), the turnover escaped from assessment to tax at Rs.16,14,447/- at 8% with other components of tax such as surcharge, additional surcharge and additional sales tax. The assessing Officer also proposed to levy penalty at 150 percent of the tax due under Section 16(2) for wilful failure to disclose the said assessable turnover in the return and paid tax due thereon.
3. The petitioner in their objection contended that the first seller Mathuram Traders was a registered dealer. The petitioner was not aware of the cancellation of the registration certificate of Mathuram Traders and made a request for the supply of the report of the Commercial Tax Officer, Perambur, who at the instance of the assessing officer conducted an enquiry as to the existence of the Mathuram Traders and their trading activity and reported that the said Mathuram Traders were non-existing dealer. It was further submitted that the purchase by the petitioners was bona fide and on that ground requested to drop the proceedings initiated under Section 16 for the purpose of re-assessment and also for levy of penalty. The Assessing Officer has, after taking into consideration of the objections, and the materials available before him, rejected the objections of the petitioner and ultimately completed the revised assessment under Section 16 by levying tax on the escaped turnover as above stated. In addition to that, the assessing officer also levied a penalty in a sum of Rs.1,97,369/- at 150 percent of the tax due.
4. The petitioner carried the matter again on appeal to the first appellate authority, the Appellate Assistant Commissioner, who confirmed the assessment of the turnover of Rs.6,14,447/-, however reduced the penalty to 100 percent from 150 percent.
5. The petitioner further carried the matter on Second Appeal to the Sales Tax Appellate Tribunal. The Tribunal by its order dated 22.9.1999 dismissed the appeal. As against the order of dismissal, t
