State of Tamil Nadu vs Abirami Agencies

Raju, J.—The State has filed the above revision challenging the order of the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench),

Madras, setting aside the penalty levied u/s 12(3) of the Act.

The respondent/assessees were dealers in liquid ammonia, ammonia tracing paper, tracing paper, drawing materials, etc. During the assessment

year 1979-80 they reported their total and taxable sales turnover of Rs. 9,27,195.06 and Rs. 3,33,603.09 respectively in their monthly returns in

form A2 filed by them for the said year under the Tamil Nadu General Sales Tax Act, 1959. After verification and checking of their accounts, the

assessing officer determined the total and taxable turnover at Rs. 11,67,044 and Rs. 6,05,390 respectively and subjected the assessee to tax,

surcharge and additional tax and also to a penalty of Rs. 1,878 u/s 12(3) of the Act.

Aggrieved, the respondent/assessees filed an appeal before the Appellate Assistant Commissioner. The said appellate authority refixed the total

turnover at Rs. 10,23,816 and the taxable turnover at Rs. 4,62,252. While modifying the assessment made the said appellate authority also

reduced the penalty to Rs. 599 being the 50 per cent of the tax due of Rs. 1,198.73. Not satisfied, the assessees pursued the matter further before

the Tribunal.

The Appellate Tribunal partly allowed the appeal by refixing the taxable turnover at Rs. 3,98,616.78 of which Rs. 2,42,800.91 taxable at 8 per

cent. and Rs. 1,55,815.88 taxable at 4 per cent and also set aside the penalty levied u/s 12(3) in toto. The above revision has been filed by the

Revenue only in so far as the Tribunal has chosen to delete the penalty completely. While deleting the penalty the Tribunal carefully considered the

explanation given for the failure to account for the sales effected to Government departments as noticed on the date of inspection of the place of

business on February 27, 1980. It is not in dispute before us that subsequently the assessee reported the disputed turnover also in their monthly

returns for the month of March and remitted the tax due thereon. After adverting those extenuating circumstances the Tribunal came to the

conclusion that the non-posting of sales in the accounts noticed on the date of inspection does not amount to wilful omission or non-disclosure

warranting the levy of penalty.

Heard the learned counsel on either side. The several decisions of this Court have repeatedly reiterated the principle that it is not every case of

assessment u/s 12(2) that warrants an automatic levy of penalty u/s 12(3) of the Act and that the question of wilfulness on the part of the assessee

in suppressing a particular turnover and as to whether the assessee was guilty of wilful non-disclosure of particular item of turnover concerned have

got to be considered and decided. On the reasons assigned by the Tribunal for the finding that the assessee in the present case was not guilty of

wilful non-disclosure of particular turnover in question, we could not come to the conclusion that the findings are either unwarranted or

unreasonable or vitiated by any error of law or perversity of approach. The fact that the said turnover was disclosed in the return for the month of

March and the tax due was remitted thereon even before the finalisation of the assessment, was not disputed and that being real position the

question of levy of penalty u/s 12(3) does not arise at all and the Tribunal was right in setting aside the penalty in the present case, on the peculiar

facts and circumstances specifically found. Consequently, we see no error of law warranting our interference in this revision. The revision therefore

fails and shall stand dismissed. In the circumstances, there will be no order as to costs.

Petition dismissed.