In the High Court of Judicature at Madras Dated : 08.04.2009 Coram :- The Honourable Mr.Justice K.RAVIRAJA PANDIAN and The Honourable Mr.Justice M.M.SUNDRESH Tax Case (Revision) No.1754 of 2006 Tvl.Jothi Chemicals Pazhamcottai Sankarankovil .. Petitioner Vs. The State of Tamil Nadu rep.by the Deputy Commercial Tax Officer Sankarankovil .. Respondent TAX CASE (Revision) filed under Section 38 of the Tamil Nadu General Sales Tax Act against the order of the Sales Tax Appellate Tribunal, (Additional Bench), Madurai dated 13.7.2001 in T.A.NO.265 of 1999 and against the Proceedings of the Appellate Assistant Commissioner (CT) Tirunelveli dated 5.3.99, 8.2.96 in AP.192/96 and against the order of the Commercial Tax Officer (FAC) Sankarankoil, dated 22.4.1996 in TNGST 857932/92- 93. For Petitioner : Mr.A.Thiagarajan For Respondents : Mr.Haja Nazirudeen,Spl.G.P. (Taxes) ORDER ORDER OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J The correctness of the order of the Sales Tax Appellate Tribunal, (Additional Bench), Madurai dated 13.7.2001 in T.A.No.265 of 1999 in bringing the value of the lorry sold by the assessee for taxation and the imposition of penalty under Section 12(5)(iii) of the T.N.G.S.T.Act is put in issue in this revision. 2. The simple issue in dispute is that the assessee purchased a chassis from Ashok Leyland and he got the body built over the chassis. After using the lorry for some time, he sold it. According to the Department, the lorry as such is https://hcservices.ecourts.gov.in/hcservices/ totally a different commodity than that of chassis purchased. For that addition made on the chassis as lorry, tax has to be levied, despite the material used for putting up the body has already suffered tax. As this transaction has not been accepted by the assessee, penalty was also levied by the assessing officer. 3. When the matter is taken up for orders, learned counsel Mr.Thiagarajan appearing for the assessee very cleverly submitted that in respect of the assessment, the assessee is not disputing, however so far as the levy of penalty under Section 12(5)(iii) of the Act is concerned, it is submitted that the assessee has not suppressed the turnover on the sale of lorry. The turnover is very much available in the books of accounts as well as returns. By no stretch of imagination, the return so filed by the assessee/revision petitioner can be regarded as incorrect and incomplete return so as to attract the penal provisions of Section 12(5)(iii). 4. We also heard the argument of the learned counsel for the revenue, who argued for sustaining the penalty and perused the material on record. 5. The provisions - Section 12(3) to 12(5) of the Tamil Nadu General Sales Tax Act, as they obtained during the relevant period are to the following effect: "Section 12(3) - In addition to the tax assessed under sub-section (2), the assessing authority may, in the same order of assessment passed under sub-section (2), or by a separate order, direct the dealer to pay by way of penalty - (a) a sum which shall not be less than fifty per cent but which shall not be more than one hundred and fifty per cent of the amount of tax due on the turnover that was not wilfully disclosed by the dealer in his return, or (b) a sum which shall not be less than fifty per cent but which shall not be more than one hundred and fifty per cent of the tax assessed in the case of wilful failure to submit a return. Sec.12(4) Notwithstanding anything contained in sub-sections (1), (2) and (3), the assessing authority may, if it is satisfied that the accounts maintained by a dealer are correct, assess such dealer on the basis of such accounts, if such dealer has - https://hcservices.ecourts.gov.in/hcservices/ (i) failed to submit the prescribed return; or (ii) failed to submit the prescribed return within such period as may be prescribed; or (iii) if the return submitted is found to be incorrect or incomplete. Sec.12(5) The assessing authority may, in the order of assessment or by a separate order, direct that the dealer shall, in addition to the tax assessed under sub-section (4), pay by way of penalty, a sum - (i) which, in the case referred to in clause (i) of sub-section (4) shall not be less than fifty per cent but which shall not be more than one hundred and fifty per cent of the amount of tax payable; (ii) which, in the case referred to in clause (ii) of sub-section (4), shall be equal to two per cent of the tax payable for every month or part thereof during which the default in the submission of the return continued, subject to a maximum of fifty per cent of the tax; and (iii) which, in the case referred to in clause (iii) of sub-section (4), shall not be less than fifty per cent but shall not be more than one hundred and fifty per cent of the difference in tax payable on the turnover disclosed in the return and that determined by the assessing authority: Provided that no penalty under sub-sections (3) and (5) shall be imposed after a period of five years from the expiry of the year to which the assessment relates and unless the dealer affected has had a reasonable opportunity of showing cause against such imposition." 6. Having regard to the above statutory provision, if we apply the said provision to the facts of the present case, we are of the view that all the authorities have admitted that the entire turnover has been reflected in the books of accounts and also stated in the returns filed by the assessee. Hence, for the invocation of sub-clause (iii) of Section 12(5), the pre- condition is that the return submitted is found to be incorrect and incomplete as per Section 12(4)(iii). None of the authorities below including the Tribunal have given a finding that the return submitted by the assessee is found to be incorrect and incomplete. Hence, in the absence of such a finding, the levy of penalty under Section 12(5)(iii) is not in consonance with the penal provision provided. Hence, we are of https://hcservices.ecourts.gov.in/hcservices/ the view that the penalty imposed has to be deleted and the same is deleted. To that extent, the appellant succeeds. With this observation, the tax case revision disposed of. Usk Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To 1.The Commercial Tax Officer (FAC) Sankarankoil. 2.The Appellate Assistant Commissioner, (CT) Tirunelveli. 3.The Tamil Nadu Sales Tax Appellate Tribunal, (Additional Bench), Madurai. + 1 cc to Mr. S. Ramesh Kumar, Advocate SR No.12950 + 1 cc to the Spl Government Pleader (Taxes) Chennai 104 SR No.13360. Tax Case (Revision) No.1754 of 2006 SGL(CO) SR/18.4.2009 https://hcservices.ecourts.gov.in/hcservices/