The main legal point established in the judgment is that there can be no levy of penalty without a charging section, and the provisions of the TNGST Act cannot be the source of power for such levy.

Prabha Sridevan, J.

1. In both the cases, the assessees are aggrieved by the levy of penalty under the Tamil Nadu Additional Sales Tax Act (AST Act in short). According to them, the department cannot do so, and rely on (2004) 136 STC page 606 (S.P.G. Ramasamy Nadar & Sons Vs. Commercial Tax Officer-III, Virudhunagar and others).

2. When the matters came up for admission, the Learned Special Government Pleader submitted that the above case was decided ignoring earlier decisions of our Court reported in (1980) 46 STC page 451 (S. Rajamani Vs. The State of Tamil Nadu), (1988) 69 Page 195 (Hindustan Import Export Corporation Vs. State of Tamil Nadu), and above all (1983) 53 STC page 1(Ashok Service Centre and another Vs. State of Orissa). He submitted that 136 STC 606 (cited supra) might require reconsideration.

3. The learned Special Government Pleader very fairly placed all the decisions for and against the department and argued the matter.

4. We will first deal with the pure question of law and then the two cases on their individual merits.

5. The AST act came into force in 1970. The validity of this Act was upheld in (1974) 34 STC 73(S. Kodar Vs. State of Kerala). The Act is a short one. We will extract the same.

"The Tamil Nadu Additional Sales Tax Act, 1970

(ACT No.XIV of 1970)

(Received the assent of the Governor on 22nd May 1970)

An Act to provide for the levy of Additional Sales Tax

WHEREAS it is considered necessary to levy an additional tax on the sale or purchase

of goods;

BE it enacted by the Legislature of the State of Tamil Nadu in the Twenty-first year of the Republic of India as follows:

Section 1. Short title and commencement.--This Act may be called the Tamil Nadu Additional Sales Tax Act, 1970.

Section 1(2). It shall be deemed to have come into force on the 1st April, 1970. Levy of additional tax in the case of certain dealers.-- ..

Section 2 (1) (aa)...

(aaa) On any amount of additional tax or penalty imposed by the assessing authority remaining unpaid under this Act, the dealer referred to in clause (aa) shall pay interest as specified in sub-section (3) of Section 24 of the said Act, in addition to such amount of additional tax or penalty due. (as amended by Act 14 of 2005)

Section 2(1)(b).

The provisions of the said Act shall apply in relation to the additional tax payable under clause (aa) as they apply in relation to the tax payable under the said sub-section.

The provisions of the said Act shall apply in relation to the additional tax payable under clause (aa) and the interest payable under clause (aaa) as they apply in relation to the tax and interest payable under the said Act.(as amended by Act 14 of 2005)

Section 2(3). Any dealer who collects the additional tax payable under sub-section(1) in contravention of the provisions of sub-section (2) shall be punishable with fine which may extend to one thousand rupees, and no Court below the rank of Presidency Magistrate or a Magistrate of the First Class shall try any such offence.

Section 3-B. All the provisions relating to offences and penalties of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), hereafter in this section referred to as the said Act, shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any additional tax required to be collected under this Act, or in relation to any process connected with such assessment; re-assessment, collection or enforcement of payment as if the additional tax under this Act, were a tax under the said Act."

Clause (aaa) was introduced and Clause (b) was substituted in its present form by the Amendment Act (14) of 2005 with retrospective effect from 01-04-1970.

This was because of the decision in Kartik Roller Flour Mills which we will deal with later. S.3-B was inserted by Act 31 of 1996 from 16-04-1997."

6. The Statement of Objects and Reasons for the 1996 Amendment act is as follows:

"With a view to