State of Tamil Nadu vs Mayur Enterprises

P.P.S. Janarthana Raja, J.—The above Revision is filed by the Revenue u/s 38 of the Tamil Nadu General Sales Tax Act, 1959, to revise

the order of the Tamil Nadu Sales Tax Appellate Tribunal (AB), Madurai, dated 5.7.2004 passed in Madurai Tribunal State Appeal No. 148 of

2003, raising the following questions of law:-

Whether the Tribunal is correct in upholding the order of the Appellate Assistant Commissioner who deleted the assessment made on

suppressed turnover arrived at inspection?

Whether the Tribunal is correct in upholding the order of the Appellate Assistant Commissioner who deleted the penalty levied u/s 16(2) of the

TNGST Act, 1959?

The relevant assessment year is 2000-2001. The respondent-assessee is a dealer in hardwares. The assessee was assessed on a total and taxable

turnover of Rs. 37,76,428/- and Rs. 21,38,662/- respectively, for the said assessment year. Subsequently there was an inspection by the

Enforcement Wing Officers on 22.12.2000. At the time of inspection, the officers recovered 9 slips of papers containing entries of business

transactions were recovered under issue of D7 receipts. Out of the slips recovered, Slip Nos. 1, 2, 3, 6 and 7 were taken as a basis for

suppression of business transactions. The Assessing Officer also made equal addition and also levied penalty. The Assessing Officer estimated the

total suppressed turnover at Rs. 1,24,864/- and levied tax at 11% and also levied penalty u/s 16(2) of the TNGST Act. Aggrieved by revised

order, the assessee filed an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner allowed the appeal.

Aggrieved by that, the Revenue preferred an appeal before the Appellate Tribunal. The Appellate Tribunal dismissed the Revenue''s appeal on the

ground that there is no suppression, and also deleted the penalty. Aggrieved by the same, the revenue has filed the present revision, raising the

above questions of law.

Learned Government Advocate appearing for the revenue contended that there was an inspection by the Enforcement Wing Officers of the

Department and certain incriminating documents were recovered and on that basis, suppression was estimated and equal addition and penalty

were levied. There is enough proof available on record to show that there is suppression. Therefore, the Assessing Officer is justified in making

revised assessment and also in levying penalty. The Tribunal deleted the addition and also penalty without any basis and justification and also

without considering the relevant materials. Therefore, the order passed by the Assessing Officer is in accordance with law and the same should be

restored and the order of the Tribunal has to be set aside.

Heard the counsel and perused the documents available on record. There is no dispute that out of 9 slips recovered at the time of inspection,

Slip Nos. 1, 2, 3, 6 and 7 were taken as evidence for suppression of business transactions. The Tribunal, in paragraphs-9, 10 and 11 of the order,

considered the matter in detail and taken a view that there was only delay in accounting due to unavoidable reasons. The Tribunal also stated that

the delay for the accounting has been properly and convincingly explained by the assessee. Further, a factual finding has been given by the Tribunal

that there was no abnormal delay in accounting and there was a delay of only two days. After taking into account of the same, the Tribunal was of

the view that it does not affect the genuineness of the transactions of the assessee, and following the principles enunciated in the decision of this

Court in the case of Gomraj Metal Wares v. State of Tamil Nadu, (1993) 3 MTCR 82, the Tribunal held that there is no suppression of

transactions with reference to Slip Nos. 1, 2 and 3. With regard to Slip Nos. 6 and 7 also, the Tribunal has given a factual finding in paragraph-11

of the order that those slips do not contain any ingredient of purchase or sale transaction and they are only estimates. Therefore, the Tribunal

correctly deleted the addition made on the basis of suppression. Since the entire actual suppression to the extent of Rs. 62,432/- has been deleted,

the Tribunal also deleted the equal time addition. Further, the Tribunal has also given a factual finding that there is no wilful non-disclosure of

turnover by the assessee and therefore, penalty cannot be levied u/s 16(2) of the TNGST Act. Concurrent finding has been given by both the

authorities below that there is no suppression and wilful non-disclosure of the turnover by the assessee, and the same is based on valid materials

and evidence. Under the circumstances, we are of the considered view that the order passed by the Tribunal is in conformity with law. We do not

find any error, illegality or infirmity in the order of the Tribunal so as to warrant interference. The order of the Tribunal is based on valid materials

and evidence. It is a question of fact and it is not a perverse order. Under the circumstances, no questions of law arise for our consideration.

Hence, the order of the Tribunal is confirmed and the Tax Case (Revision) is dismissed. No costs.