The main legal point established in the judgment is the requirement for dealers to comply with the provisions of the Tamil Nadu Additional Sales Tax Act and the Tamil Nadu General Sales Tax Act, including the prohibition on collecting additional sales tax and the conditions for levying penalties.

P.P.S.JANARTHANA RAJA,J.,

1. The present revision is filed by the petitioner/assessee against the order of the Sales Tax Appellate Tribunal (Additional Bench), Chennai dated 13.12.1999 passed in T.A.No.67 of 1999 raising the following substantial questions of law:-

"1. Whether in the facts and circumstances of the case, the Tribunal is correct in holding that the petitioner has collected Additional Sales Tax from the Electricity Board overlooking the fact that it is not the tax collected but reimbursement made by the Electricity Board ?

2. Whether the Tribunal was correct in upholding the levy of penalty imposed under Section 12(5)(iii) of the TNGST Act, 1959?"

2. The brief facts of the case are as under:-

The assessee is a Government of India undertaking engaged in the execution of a turnkey works contract for the Tamil Nadu Electricity Board for erecting and commissioning a captive power plant, during the relevant assessment year viz., 1991

92. The petitioner/assessee reported a total turnover of Rs.16.85,15,016.13 and a taxable turnover of Rs.Nil. The Assessing Officer originally assessed on a total and taxable turnover of Rs.17,31,59,589/- and Rs.15,17,09,238/-respectively. In the assessment order dated 30.09.1993, the Assessing Officer observed that the dealer have collected Additional Sales Tax from TNEB at 2.25% amounting to Rs.34,13,471/-on their sales turnover. Therefore, proposed to levy penalty under Section 22(2) of the Tamil Nadu Additional Sales Tax Act at 100% of the excess collection made amounting to Rs.34,13,471/-. After receiving the objections from the assessee, the Assessing Officer dropped the levy of the penalty. Subsequently, a revised order dated 24.01.1995 was passed by the Assessing Authority and levied a penalty of Rs.34,13,471/-under Section 3A of the Tamil Nadu Additional Sales Tax Act, 1970 and Rs.19,03,682/-under Section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959. Aggrieved by the same, the assessee filed appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner dismissed the appeal and upheld the levy of penalty. Aggrieved by the same, the assessee filed further appeal before the Sales Tax Appellate Tribunal, who, also dismissed the appeal and confirmed the order of the lower authorities. Aggrieved by the same, the assessee filed the present revision raising the above questions of law.

3. The learned counsel appearing for the petitioner/assessee contended that the order passed by the Tribunal is illegal, wrong and without justification. It is further contended that the Tribunal is wrong in holding that the petitioner collected Additional Sales Tax from the Tamil Nadu Electricity Board overlooking the fact that it is not collection made by the petitioner, but, it was only reimbursement made by the Board of the expenditure incurred by the petitioner. It is further contended that it is wrong to state that there is a collection of additional sales tax in contravention of Section 3-A of the Tamil Nadu Additional Sales Tax Act, 1970. It is further contended that the petitioner is a Government of India undertaking and was under the bonafide belief that it is not subject to tax since it was only voluntarily reimbursed by the Electricity Board. It is also further contended that it is not a fit case for levying 100% penalty and alternatively submitted that the amount of levy of penalty is excessive, exorbitant and arbitrary. In respect of penalty levied under Section 12(5)(iii) of the Tamil Nadu General Sales Tax Act, 1959, there is no finding by the authorities below that there is wilful suppression of taxable turnover. It is further contended that the Assessing Officer ought to have levied penalty under Section 16(2) read with Section 12(5)(iii) of the TNGST Act, 1959. It is further contended that the levy of penalty is unwarranted. Therefore, the Tribunal order is not in accordance with law. Therefore, the same may be set aside.

4. Per contra