Tvl.Karthikeyan Mills Vs. State of Tamil Nadu - Court Judgment

SooperKanoon Citationsooperkanoon.com/1167367
CourtChennai High Court
Decided OnJun-26-2013
JudgeThe Hon'ble Mrs.Justice CHITRA VENKATARAMAN
AppellantTvl.Karthikeyan Mills
RespondentState of Tamil Nadu
Excerpt:
in the high court of judicature at madras dated :26. 06.2013 coram the honourable mrs.justice chitra venkataraman and the honourable ms.justice k.b.k.vasuki tax case (revision) no.194 of 2011 --- tvl.karthikeyan mills rep. by its proprietor mr.v.karthikeyan no.12/1, bye-pass road arcot, vellore district ...petitioner -vs- the state of tamil nadu represented by the deputy commissioner of commercial taxes vellore division vellore ...respondent tax case revision filed under section 38 of tngst act, 1959 to revise the order of the tamil nadu sales tax appellate tribunal, chennai bench, dated 30.04.2008 passed in sta.no.1545/2000. for petitioner : mr.k.soundararajan for respondent : mr.v.haribabu addl.govt.pleader (tax) order (the order of the court was made by chitra venkataraman, j.) the assessee is on revision as against the order of the sales tax appellate tribunal relating to the assessment year 1996-97 raising the following questions of law :- ".1. whether the appellate tribunal had properly understood the findings given by the appellate assistant commissioner before restoring the order of the assessing officer in respect of the estimation of first purchase of groundnut kernel and the consequential out turn of oil and oil cake are concerned ?.2. whether the appellate tribunal is correct in stating that the appellate assistant commissioner's conclusion is wrong on the basis that it was not proved that the word ".kjy;". was not available in the dealers copy whereas it is available only in the department's copy, therefore the same was inserted after the inspection when the appellate assistant commissioner had stated that the word ".kjy;". was inserted after the statement was recorded in all the copies in order to attract the tax liability under the tngst act and no where it was claimed by the dealer that the word was not available in the dealers copy and available only in the department's copy. therefore, the appellate tribunal was wrong in coming to the conclusion that the wrong appreciation of evidence by the appellate authority has led to the wrong conclusion ?.3. whether the appellate tribunal is also correct in restoring the penalty when the entire estimation is in doubt and no evidence was available to corroborate the same ?.".2. it is seen from the order of the assessing officer that the place of the business of the assessee, who is a dealer in groundnut kernel and oil cake was subjected to statistical case study on 25.06.1996. the reconciliation of the opening stock of oil cake as on 01.04.1996 revealed excess stock ; the opening stock as per accounts was 4840 kgs ; as per the statistical inspector's report, it was 7256 kgs. based on this, after recording the statement, the assessing officer estimated the purchase of groundnut kernel, sales of resultant oil and oil-cake for the purpose of assessment. aggrieved by this, the assessee went on appeal before the first appellate authority.3. it is stated that the assessee had deposed statement before the enforcement wing officials on 26.11.1996, which is available at page 179 of the assessment file. pointing out the statement ". mz;lj; jzpf;if neuk; tif kzpyh kjy; bfhs;kjy; 629000.00 te;js;sj."., the first appellate authority held that there was a gap between the words ".kzpyh bfhs;kjy ".; and it appears that the officers who wrote the statement, originally recorded without the word ".kjy; ". but interpolated the word ".kjy; ".; in between the words ".kzpyh". and ".bfhs;kjy;". and treated it as first purchase for the purpose of assessment. the first appellate authority viewed that the enforcement wing officials had recorded the statement mechanically without taking into consideration the actual state of affairs. consequently, the suppression were treated as mere surmises and accordingly deleted the estimation and accordingly, set aside the order of the assessing officer.4. aggrieved by the same, the revenue went on appeal before the sales tax appellate tribunal, which, as a matter of fact found that the first appellate authority had come to a wrong conclusion and it was contrary to the statement recorded and found in the assessment file. the tribunal held that the material available clearly showed that there was no such interpolation of the word ".kjy; ".. if the word ".kjy;". was inserted after the inspection of the enforcement wing officials, the said word ".kjy;". would not find place in the dealer's copy of the statement. thus, holding that there was no insertion, it set aside the order of the first appellate authority and restored the assessment. consequently, it also restored penalty.5. even though learned counsel for the petitioner/assessee strenuously argued in support of the order of the appellate assistant commissioner, we do not find any justification to disturb the finding of the fact by the sales tax appellate tribunal.6. however on the penalty levied, we agree with learned counsel for the petitioner/assessee that in the absence of specific provision under the additional sales tax and the surcharge act during 1996-97, the corresponding levy of penalty on the additional sales tax and surcharge liability would not arise. the levy of penalty under additional sales tax act itself was introduced only under act 31 of 1996 with effect from 16.04.1996. hence, we do not find any justification on the demand of additional sales tax for the purpose of computing penalty. accordingly, the assessing officer shall redo the assessment and the corresponding demand on surcharge and additional sales tax.7. the tax case revision stands disposed of on the above terms. no costs. (c.v.,j) (k.b.k.v.,j) 26.06.2013 index:yes/no internet:yes nvsri to 1.the deputy commissioner of commercial taxes vellore division, vellore. 2.the appellate assistant commissioner (ct) vellore. 3.the tamil nadu sales tax appellate tribunal (additional bench) chennai-104. chitra venkataraman, j.and k.b.k.vasuki, j.nvsri tax case (revision).no.194 of 2011 26.06.2013
Judgment:

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated :

26. 06.2013 Coram The Honourable Mrs.Justice CHITRA VENKATARAMAN and The Honourable Ms.Justice K.B.K.VASUKI Tax Case (Revision) No.194 of 2011 --- Tvl.Karthikeyan Mills rep. By its Proprietor Mr.V.Karthikeyan No.12/1, Bye-Pass Road Arcot, Vellore District ...Petitioner -vs- The State of Tamil Nadu Represented by the Deputy Commissioner of Commercial Taxes Vellore Division Vellore ...Respondent Tax Case Revision filed under Section 38 of TNGST Act, 1959 to revise the order of the Tamil Nadu Sales Tax Appellate Tribunal, Chennai Bench, dated 30.04.2008 passed in STA.No.1545/2000. For petitioner : Mr.K.Soundararajan For respondent : Mr.V.Haribabu Addl.Govt.Pleader (Tax) ORDER

(The Order of the Court was made by CHITRA VENKATARAMAN, J.) The assessee is on revision as against the order of the Sales Tax Appellate Tribunal relating to the assessment year 1996-97 raising the following questions of law :- ".1. Whether the Appellate Tribunal had properly understood the findings given by the Appellate Assistant Commissioner before restoring the order of the Assessing Officer in respect of the estimation of first purchase of groundnut kernel and the consequential out turn of oil and oil cake are concerned ?.

2. Whether the Appellate Tribunal is correct in stating that the Appellate Assistant Commissioner's conclusion is wrong on the basis that it was not proved that the word ".Kjy;". was not available in the dealers copy whereas it is available only in the department's copy, therefore the same was inserted after the inspection when the Appellate Assistant Commissioner had stated that the word ".Kjy;". was inserted after the statement was recorded in all the copies in order to attract the tax liability under the TNGST Act and no where it was claimed by the dealer that the word was not available in the dealers copy and available only in the department's copy. Therefore, the Appellate Tribunal was wrong in coming to the conclusion that the wrong appreciation of evidence by the Appellate Authority has led to the wrong conclusion ?.

3. Whether the Appellate Tribunal is also correct in restoring the penalty when the entire estimation is in doubt and no evidence was available to corroborate the same ?.".

2. It is seen from the order of the Assessing Officer that the place of the business of the assessee, who is a dealer in groundnut kernel and oil cake was subjected to statistical case study on 25.06.1996. The reconciliation of the opening stock of oil cake as on 01.04.1996 revealed excess stock ; the opening stock as per accounts was 4840 kgs ; as per the Statistical Inspector's Report, it was 7256 kgs. Based on this, after recording the statement, the Assessing Officer estimated the purchase of groundnut kernel, sales of resultant oil and oil-cake for the purpose of assessment. Aggrieved by this, the assessee went on appeal before the First Appellate Authority.

3. It is stated that the assessee had deposed statement before the Enforcement Wing Officials on 26.11.1996, which is available at page 179 of the assessment file. Pointing out the statement ". Mz;Lj; jzpf;if neuk; tif kzpyh Kjy; bfhs;Kjy; 629000.00 te;Js;sJ."., the First Appellate Authority held that there was a gap between the words ".kzpyh bfhs;Kjy ".; and it appears that the officers who wrote the statement, originally recorded without the word ".Kjy; ". but interpolated the word ".Kjy; ".; in between the words ".kzpyh". and ".bfhs;Kjy;". and treated it as first purchase for the purpose of assessment. The First Appellate Authority viewed that the Enforcement Wing Officials had recorded the statement mechanically without taking into consideration the actual state of affairs. Consequently, the suppression were treated as mere surmises and accordingly deleted the estimation and accordingly, set aside the order of the Assessing Officer.

4. Aggrieved by the same, the Revenue went on appeal before the Sales Tax Appellate Tribunal, which, as a matter of fact found that the First Appellate Authority had come to a wrong conclusion and it was contrary to the statement recorded and found in the Assessment file. The Tribunal held that the material available clearly showed that there was no such interpolation of the word ".Kjy; ".. If the word ".Kjy;". was inserted after the inspection of the Enforcement Wing Officials, the said word ".Kjy;". would not find place in the dealer's copy of the statement. Thus, holding that there was no insertion, it set aside the order of the First Appellate Authority and restored the assessment. Consequently, it also restored penalty.

5. Even though learned counsel for the petitioner/assessee strenuously argued in support of the order of the Appellate Assistant Commissioner, we do not find any justification to disturb the finding of the fact by the Sales Tax Appellate Tribunal.

6. However on the penalty levied, we agree with learned counsel for the petitioner/assessee that in the absence of specific provision under the Additional Sales Tax and the Surcharge Act during 1996-97, the corresponding levy of penalty on the additional sales tax and surcharge liability would not arise. The levy of penalty under Additional Sales Tax Act itself was introduced only under Act 31 of 1996 with effect from 16.04.1996. Hence, we do not find any justification on the demand of Additional Sales Tax for the purpose of computing penalty. Accordingly, the Assessing Officer shall redo the assessment and the corresponding demand on surcharge and additional sales tax.

7. The Tax Case Revision stands disposed of on the above terms. No costs. (C.V.,J) (K.B.K.V.,J) 26.06.2013 Index:Yes/No Internet:Yes nvsri To 1.The Deputy Commissioner of Commercial Taxes Vellore Division, Vellore. 2.The Appellate Assistant Commissioner (CT) Vellore. 3.The Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) Chennai-104. CHITRA VENKATARAMAN, J.

and K.B.K.VASUKI, J.

nvsri Tax Case (Revision).No.194 of 2011 26.06.2013