IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21/11/2002
CORAM
THE HON'BLE MR.JUSTICE N.V.BALALSUBRAMANIAN
AND
THE HON'BLE MR.JUSTICE K.RAVIRAJA PANDIAN
W.P.No.398 of 2001
and
W.M.P.No.509 of 2001
Uma Metal Industries
No.G-9, Industrial Estate
Vysarpadi,
Chennai-39. ... Petitioner
-Vs-
1. The State of Tamil Nadu
rep.by the Registrar
Tamil Nadu Taxation Special
Tribunal, Rajaji Salai,
Chennai-1.
2. Deputy Commercial Tax Officer,
Washermenpet I Assessment Circle,
Chennai. ... Respondent
For Petitioner : Mr.A.Thiyagarajan
For Respondents: Mr.T.Ayyasamy,
Spl.Govt. Pleader
:JUDGMENT
K.RAVIRAJAPANDIAN
Prayer: Writ Petition filed under Article 226 of the Constitution of
India for issue of a writ of certiorari as stated therein.
The writ petition is filed against the order of the Tamil Nadu
Taxation Special Tribunal dated 14.6.2000 made in Tax Case Revision No.160 of
2000 on the file of the first respondent.
2. The brief facts of the case are as follows:
The petitioner is a dealer in Aluminium circle and vessels. By
original assessment, for the assessment year, 1989-90, the petitioner was
assessed to tax on a total and taxable turnover of Rs.17,71,016/- and
RS.16,14,447/- respectively under assessment order dated 19.9.1991. That
order was carried on appeal to the Appellate Assistant Commissioner, who by
his order dated 31.8.1994 in A.P.No.32 of 1993, set aside the assessment and
directed the Assessing Officer, the second respondent to pass orders afresh
after investigating the matter further and giving an opportunity to the
petitioner. After remand, the Assessing Officer issued a revised notice
calling upon the petitioner to file objections to the revised notice. In the
pre-revision notice, the assessing Officer has stated that the petitioner has
availed exemption in respect of a turnover of Aluminium in a sum of
Rs.13,45,373/- on the ground the goods suffered tax at the hands of one
Mathuram Traders, No.30, Jambulingam Main Road, Madras-82 i.e., second sale
exemption at the hands of the petitioner assessee and on enquiry, it was found
that the first seller, Mathuram Traders were not doing business and the
Registration Certificate was cancelled from 23.8.1989. The said Mathuram
Traders were only bill traders and never handled the goods and as such, the
turnover shown as purchased from the Mathuram Traders in the petitioner’s
returns has been the goods purchased from unknown sources. In order to avoid
tax, the assessee produced bogus bills in the name of non-existent dealer.
The payment in respect of goods by the assessee was also not supported by any
evidence. Therefore, the assessing officer proposed to determine under
Section 16(1)(a) of the Tamil Nadu General Sales Tax Act, (hereinafter
referred to as the Act), the turnover escaped from assessment to tax at
Rs.16,14,447/- at 8% with other components of tax such as surcharge,
additional surcharge and additional sales tax. The assessing Officer also
proposed to levy penalty at 150 percent of the tax due under Section 16(2) for
wilful failure to disclose the said assessable turnover in the return and paid
tax due thereon.
3. The petitioner in their objection contended that the first seller
Mathuram Traders was a registered dealer. The petitioner was not aware of the
cancellation of the registration certificate of Mathuram Traders and made a
request for the supply of the report of the Commercial Tax Officer, Perambur,
who at the instance of the assessing officer conducted an enquiry as to the
existence of the Mathuram Traders and their trading activity and reported that
the said Mathuram Traders were non-existing dealer. It was further submitted
that the purchase by the petitioners was bona fide and on that ground
requested to drop the proceedings initiated under Section 16 for the purpose
of reassessment and also for levy of penalty. The Assessing Officer has,
after taking into consideration of the objections, and the materials available
before him, rejected the objections of the petitioner and ultimately completed
the revised assessment under Section 16 by levying tax on the escaped turnover
as above stated. In addition to that, the assessing officer also levied a
penalty in a sum of Rs.1,97,369/- at 150 percent of the tax due.
4. The petitioner carried the matter again on appeal to the first
appellate authority, the Appellate Assistant Commissioner, who confirmed the
assessment of the turnover of Rs.6,14,447/-, however reduced the penalty to
100 percent from 150 percent.
5. The petitioner further carried the matter on Second Appeal to the
Sales Tax Appellate Tribunal. The Tribunal by its order dated 22.9.1 999
dismissed the appeal. As against the order of dismissal, the petitioner moved
the Taxation Special Tribunal byway of revision. In that revision, as seen
from the order of the Special Tribunal, the one and only point raised before
the Special Tribunal was, the registration certificate was issued to the first
seller Mathuram Traders and the renewal was also effected subsequently and
hence there was a presumption that the seller was carrying on business and the
assessee should not suffer on the ground that he was not able to prove the
existence of the dealer, who issued the bill for the sale of goods. However,
the Tribunal rejected the contention of the assessee by giving reason that the
presumption as contended by the petitioner has been rebutted properly by
sufficient material and the authorities below have concluded that the sale at
the hands of the petitioner in a turnover of Rs.6,14,447/- was the first sale
is a purely a question of fact. As to the existence of the first seller
cannot be a question of law to be decided by the Tribunal as on question of
law alone a revision is maintainable and thereby non-suited the petitioner for
any relief. That order is put in issue in the present revision petition.
6. However Mr.Thiyagarajan, learned counsel appearing for the
petitioner has argued the case and submitted that the revision of assessment
under Section 16 of the Act is not at all maintainable and unwarranted and
liable to be set aside since it was passed without furnishing the copy of
materials, which formed basis for the revision. He further submitted that
Section 16 of the Act speaks about best judgment assessment. If the turnover
of an assessee is reflected in the return filed by him or is available in the
books of accounts and the assessment is made either based on the return or on
the basis of accounts, it cannot be treated as best judgment assessment. An
assessment to be a best judgment, there must be some addition to the turnover
by some guess work made by the assessing officer by rejecting the return or
books of accounts. If the return filed by the assessee is accepted and
assessment is made or an assessment is made based on books of accounts, it
cannot be best judgment assessment. So far as the present case is concerned,
no addition is made to the reported turnover and the reported turnover is
accepted, but only tax has been levied on the turnover for which exemption has
been claimed and allowed originally. Hence, the revisional assessment is not
maintainable.
7. On the other hand, the learned Government Pleader has submitted
that there is absolutely no reason, whatsoever for the petitioner to contend
that the orders of re-assessment has been passed violating the principles of
natural justice, in the sense, not providing copies relied on for the purpose
of revision of assessment. The learned Government Pleader has contended that
the alleged request of the petitioner of the copy of the statement given by
the landlord of Mathuram Traders is not at all necessary. The order is not
based on the statement given by the landlord of Mathuram Traders, but it is
based on the report of the Commercial Tax Officer of Perambur Assessment
Circle, within whose jurisdiction Mathuram Traders was said to have carried on
business. The entire statement of the Commercial Tax Officer has been
reproduced in the pre-revision notice and as such, the entire material, which
forms the basis for the purpose of revision notice has been made available to
the petitioner and as such he cannot contend that the order has been passed
violating the principles of natural justice. He further contended that
Section 12 of the T.N.G.S.T.Act and Section 16 of the T.N.G.S.T.Act, which
provide for assessment and reassessment are independent of each other.
Section 12 provides for assessment in two contingencies viz., (1) that the
assessment of the dealer shall be based on the prescribed return filed by
dealer, and (2) if no return is filed by the dealer as required in the
provisions of the Act or if the return so filed by the dealer appears to be
incomplete or incorrect, the assessing authority after making such enquiry as
it considers necessary make an assessment to the best of his judgment. But
Section 16, which provides for revision of assessment, is very clear in its
purport to the effect that for any reason, the whole or any part of the
turnover of the dealer has escaped assessment of tax, the assessing authority,
subject to the provisions of sub-section (2) of Section 16, and within a
period of five years from the expiry of the year to which the tax relates,
determine to the best of its judgment, the turnover which has escaped
assessment and assess the tax payable on such turnover after making such
enquiry.
Further, he contended that sub-section (2) of Section 16 provides that
if the assessing Officer satisfied that the escape from assessment is due to
wilful non-disclosure of the assessable turnover by the dealer, the authority
can in addition to the tax assessed levy penalty as provided in the Section
and contended that there is absolutely no infirmity or irregularity in the
order passed, since the turnover brought to tax by means of revision is
escaped from assessment to tax as provided under Section 16 and as such, there
is absolutely no case for the petitioner to put forward that there must be
some addition to the turnover reported so as to make an assessment under
Section 1 6. It is his contention that if any turnover for any reason escaped
for assessment to tax, that is enough for invocation of Section 16. As a
matter of fact, in this case, the turnover in respect of Rs.16,14 ,447/- has
escaped to assessment to tax on the ground that it is a second sale, which is
ultimately found against the petitioner and such escapement of the turnover
from being assessed to tax gives every jurisdiction to the authorities to
invoke Section 16.
8. We heard the arguments of the learned counsel on either side and
perused the materials on record.
9. In respect of the first contention that the reasons, which weighed
the authorities concerned to come to the conclusion that the whole or any part
of the turnover of the business of the dealer has escaped assessment of tax
have been stated in the showcase notice, as also the reason for arriving at
such a prima facie conclusion, need not detain us any longer since the issue
has been considered by the Division Bench of this Court in MUTHURAJA TRADERS
VS. DEPUTY COMMERCIAL TAX OFFICER, PARK ROAD ASSESSMENT CIRCLE, ERODE
reported in (1997) 106 STC 283, though in the context of such reasons shown in
the show cause notice would tantamount to pre-judging the issue, held as
follows:
“Under section 16 of the act, where, for any reason, the whole or any
part of the turnover of business of a dealer has escaped assessment to tax,
the assessing authority may, subject to the provisions of sub-section (2) at
anytime within a period of five years from the expiry of the year to which the
tax relates, determine to the best of its judgment the turnover which has
escaped assessment and assess the tax payable on such turnover after making
such enquiry as it may consider necessary and after giving the dealer a
reasonable opportunity to show cause against such assessment. Therefore, the
reasons which weigh with authority concerned to come to the conclusion that
the whole or any part of the turnover of the business of the dealer has
escaped assessment to tax have to be necessarily stated in the show cause
notice as also the reasons therefor for arriving at such a prima facie
conclusion to enable the assessing authority concerned to effectively issue
show cause notice to the proposals contained in the notice. It is not correct
to invoke the provision for revision of assessment under section 16 of the Act
on a mere statement of the facts alone and the reasons which made the
assessing authority to initiate proceedings at least have to be disclosed to
enable the assessee to file his objections and effectively show cause against
the proposals.”
Thus, the very purpose of giving show cause notice is to effectively
show cause against the proposal. The entire materials, which formed basis for
issuance of the show cause notice has been stated in the show cause notice
itself so as to enable the petitioner to put forth his cause effectively.
10. So far as the present case is concerned, the revision of
assessment is based upon the report of the Commercial Tax Officer, Perambur
Assessment Circle, which stated that the seller to the petitioner ie.,
Mathuram Traders was a bogus dealer. They never dealt with the goods and
their certificate was also cancelled on 30.10.1990 with effect from 23.8.1989.
The entire content of the report was reproduced in the pre-revision notice
calling for objection from the petitioner. When such being the position,
there is absolutely no necessity for once again furnishing the statement of
the Commercial Tax Officer, Perambur Assessment Circle, which is also an
inter-Department communication. Nothing is concealed from the
petitioner/assessee, which formed basis for issuance of the revised notice.
The very purpose of furnishing the copy of the statement, which formed the
basis for the notice, is to make known the affected party, the basis or reason
for the issuance of notice. The materials are provided in the show cause
notice itself.
11. Moreover, the petitioner herein filed an appeal before the
Appellate Assistant Commissioner against the original order of assessment
complaining that a copy of the statement given by the landlord was not
furnished to him, and the Appellate Assistant Commissioner set aside the order
of assessment and remitted the matter. The fresh order of assessment is based
on the show-cause notice dated 10.4.1995 and the Deputy Commercial Tax Officer
relied only on the letter received from the Commercial Tax Officer, Perambur-I
Assessment Circle, and the show-cause notice dated 7.6.1995, as already
observed by us, contains the full extract of the letter of the Commercial Tax
Officer addressed to the assessing officer herein. We are therefore of the
view that no prejudice has been caused to the petitioner. The submission of
Mr.Thiyagarajan, learned counsel that the petitioner was granted no
opportunity to cross-examine the landlord of the premises lacks substance as
the assessing officer in the subsequent order of assessment has not placed any
reliance on the statement of the landlord, but solely relied upon the letter
of the Commercial Tax Officer, Perambur-I Assessment Circle. Therefore the
submission of the learned counsel made with reference to the additional
typed-set filed by him enclosing the earlier show-cause notice dated 18.6.1991
does not carry any conviction and appeal to us as the fresh order of
assessment is not based on the earlier show-cause notice dated 18.6.1991, but
on the fresh show-cause notice dated 10.4.1995 issued pursuant to the order of
the Appellate Assistant Commissioner.
12. So far as the second contention is concerned, Sections 12 and 16
of the T.N.G.S.T.Act are two different provisions, independent of each other,
and are working in different fields and in different circumstances. Section
12 provides for procedure to be followed by the assessing authority while
making assessment. As per Section 12, the assessment of a dealer shall be
made on the basis of the prescribed return filed by the dealer relating to his
turnover within the time prescribed. It also empowers that if the dealer
failed to file return within the prescribed time, or if the return filed by
the dealer appears to the assessing authority to be incomplete or incorrect,
the assessing authority to assess the dealer to the best of its judgment after
making such enquiry. However, Section 16 provides for revision of escaped
turnover and operates in a totally different circumstance and in a totally
different situation, which provides that where for any reason whatsoever, the
whole or any part of the turnover of a dealer has escaped assessment to tax,
the assessing authority, subject to the provisions of sub-section (2), which
empowers the assessing authority to levy penalty to determine to the best of
its judgment, the turnover which has escaped assessment to tax and assess the
tax payable on such turnover. The scenario or situation for invocation of
Section 16 is totally different from the scenario or situation for making
assessment under Section 12. Section 16 applies or operates after the
original assessment under Section 12 has been completed and for any reason, on
the completed assessment, a whole or any part of the turnover has escaped
assessment to tax, either by way of not being shown in the books of accounts
or in the returns or shown in the returns and claimed exemption, that part of
the turnover for which tax has not been assessed has become the escaped
turnover and on such turnover, subject to sub-section (2) of Section 16, the
assessing authority is empowered to determine to the best of its judgment.
The expression “best of its judgment” employed in Section 12(2) and 16(1) are
to be construed in the context in which the expression is employed.
13. The contention exactly similar to the one now raised by Mr.
Thiyagarajan has been raised before this Court in the case of SURYA
FERTILISERS AND CHEMICALS VS. THE STATE OF TAMIL NADU reported in (1977) 40
STC 538 and the Division Bench of this Court repelled the contention. In
order to appreciate the issue, it is but necessary to extract the same.
“Basing upon the language of these sub-clauses, the contention of the
learned counsel for the petitioners is twofold. One is that the section uses
the expression “turnover of business of a dealer has escaped assessment to
tax” and, according to the learned counsel, when the assessing authority, at
the first instance, has actually applied his mind to a particular turnover and
rightly or wrongly held that the turnover was not liable to be included as a
taxable turnover, such turnover cannot be said to be an escaped turnover.
According to the learned counsel, the expression “escaped turnover” will
include only that turnover which was not at all noticed by the assessing
authority, whatever the reason may be, but it will not include the turnover
which was actually noticed and with reference to which the assessing authority
has come to a conclusion one way or the other. The second submission based on
the language of section 16(1) of the Act is that the section talks of the
assessing authority determining to the best of judgment the turnover which has
escaped assessment and the reference to the best of judgment will necessarily
import into it the notion of an estimate of the turnover and when the turnover
was actually before the authority originally and was decided not to be
includible in the taxable turnover, the question of estimating such a turnover
by way of rectification or reopening cannot arise and, therefore, to such a
turnover section 16(1) cannot apply. We are of the opinion that there is no
substance in either of these contentions. As far as the first contention
based upon the notion of escaped turnover is concerned, the question has been
considered by a Bench of this Court, to which one of us was a party, in
Yercaud Coffee Curing Works Ltd., Salem v. State of Tamil Nadu represented by
the Deputy Commercial Tax Officer, Salem (Rural) ( (1977) 40 STC 531)
(T.C.Nos.298 to 300, 305 and 314 of 1971 decided on 18th March, 1976). The
Bench has taken the view that section 16 will apply even to a turnover which
was originally considered by the assessing authority, which authority after
applying its mind to the turnover has held that the turnover, ;for some reason
or other, was exempt from tax or was not includible in the taxable turnover.
Following that judgment, we must reject the first contention advanced by the
learned counsel for the petitioners.
The second contention is the result of a confusion between the best
judgment assessment provided for in section 12(2) of the Act and the
determination to the best of judgment of the turnover provided for in section
16(1) of the Act. The language used in the two sections and the purpose for
which the best judgment test is to be applied are different. Therefore,
simply because section 16(1) uses the expression “best of its judgment”, it
cannot be held that section 16(1) can be invoked only in a case where an
element of estimate of the turnover enters into the calculation and has no
application to a case where a turnover is known and definite and only the
liability of the same to tax is under consideration. Therefore, we reject the
second contention also.”
The above said judgment is in all fours answer the argument of the
learned counsel Mr.Thiyagarajan against him.
14. In the case of DINOD CASHEW CORPORATION VS. THE DEPUTY
COMMERCIAL TAX OFFICER AND ANOTHER reported in (1986) 61 STC 1, the Division
Bench of this Court has held that having regard to the expression employed for
any reason in Section 16, it was clear that even where a turnover was
disclosed, which was not subjected to tax, because at the relevant time, the
assessing authority thought that a particular turnover was exempted under the
provisions of Section 5(3) of the Central sales Tax Act, it would be
permissible for the assessing authority to reopen the assessment under section
16(1)(a) of the T.N.G.S.T.Act. Hence, we are of the view that the argument of
the learned counsel for the petitioner has to be rejected as it contained
neither any merit nor any substance.
15. In support of his contention, the learned counsel Mr.
Thiyagarajan appearing for the petitioner relied on the following decisions:
(1) THE STATE OF MADRAS VS. S.G.JAYARAJ NADAR AND SONS reported in
(1971) 28 STC 700,
(2) APPOLLO SALINE PHARMACEUTICALS (P) LTD. VS. COMMERCIAL TAX
OFFICER (FAC) AND OTHERS reported in (2002) 125 STC 505 and
(3) STATE OF TAMIL NADU VS. SRI SHANMUGHANANDA AND CO. reported in
(1997) 104 STC 61.
16. The first of the judgment in THE STATE OF MADRAS VS. S.G.
JAYARAJ NADAR AND SONS reported in (1971) 28 STC 700 is one rendered while
construing Section 12(2) and 12(3) of the Madras General Sales Tax Act, in
which the Supreme Court after taking into consideration of the provisions of
the Act, as stood then, held that the penalty can be levied under section
12(3) of the Madras General sales Tax Act, 1959 on the ground that the dealer
submitted an incomplete or incorrect return only after the assessment had to
be made to the best of its judgment by the assessing authority. Where certain
items which are not included in the turnover are discovered from the dealer’s
own turnover, the assessment cannot be regarded as best judgment and penalty
cannot be levied in respect of such item. The other decision relied on by the
learned counsel is APPOLLO SALINE PHARMACEUTICALS (P) LTD. VS. COMMERCIAL
TAX OFFICER (FAC) AND OTHERS reported in (2002) 125 STC 5 05, which is also a
decision, which construe the provisions of Section 12(1) to 12(5) of the
T.N.G.S.T.Act and on such construction of the said provisions, the Court held
that except during the period from December 3, 1979 to May 27, 1993 penalty
under T.N.G.S.T.Act, 1959 could be levied only in a case where the assessment
is a best judgment assessment made on an estimate and not by relying solely on
the accounts furnished by the assessee in the prescribed return. On and after
April 1,1996 an explanation has been added below section 12(3) which requires
the turnover relating to the tax assessed on the basis of the accounts of the
assessee, to be disregarded while determining the turnover on which the
penalty is to be levied under section 12(3). These two decisions are not
applicable to t he facts of the present case, since the said decisions
construed the assessment provisions ie., Section 12, which provides for two
kinds of assessments, as already stated, on two situations, when no return is
filed or after rejecting the returns filed as incorrect and incomplete and
rejecting the books of accounts. However, in the present case, we are
concerned with section 16 of the T.N.G.S.T.Act, which provides for
re-assessment for any reason a taxable turnover is escaped of assessment from
tax.
17. The other decision relied on by the learned counsel for the
petitioner is STATE OF TAMIL NADU VS. SRI SHANMUGHANANDA AND CO. reported in
(1997) 104 STC 61. So far as the case cited is concerned, the point in issue
was not seriously disputed and no issue raised and which has been argued and
ultimately a finding has been given. The same is evident from paragraph No.5
of the said judgment, which proceeds as follows:
“In so far as the merits of case, in levying penalty under section 1
6(2) of the Act, is concerned, it was represented that the turnover of
Rs.1,12,664 was assessed on the basis of book turnover. The assessed turnover
was stated to be found in the books of accounts and the accounts were accepted
by the department. In such a case,the Appellate Assistant Commissioner
pointed out that in view of the decision of the Supreme Court in State of
Madras v. S.G.Jayaraj Nadar & Sons (1971 ) 28 STC 700 penalty is not exigible
under section 16(2) of the Act. This situation was not disputed seriously.
Therefore, on merits, penalty under section 16(2) of the Act is not exigible
in the case of the assessee.”
18. The Supreme Court in the case of MITTAL ENGINEERING WORKS (P)
LTD. VS. COLLECTOR OF CENTRAL EXCISE, MEERUT reported in (1997) 106 STC 201
has held that a decision cannot be relied upon in support of a proposition
that it did not decide. As already stated in 104 STC 61, where penalty be
levied under Section 16(2) of the Act in respect of a turnover available in
the books of accounts has not been discussed or decided, since the issue has
not been disputed by the parties to the proceedings, the Division Bench
deleted the penalty. Such a clear dispute has been raised and arguments at
length on the side of both the parties were heard and finally the Division
Bench in SURYA FERTILISERS AND CHEMICALS VS. THE STATE OF TAMIL NADU reported
in (1977) 4 0 STC 538 has held against the assessee. Hence, it cannot be
construed that 106 STC 201 has rendered a decision on consideration on the
issue.
19. The other decision relied on by the learned counsel for the
petitioner is DEPUTY COMMISSIONER OF COMMERCIAL TAXES, TRICHY DIVISION, TRICHY
VS. V.R.KUPPUSAMY GOUNDER AND SONS reported in (1995) 98 STC 4 08,
wherein the assessment of the dealer was made after examining relevant
invoices, vouchers, accounts and records. The dealers’ claim to exemption in
respect of purchases of groundnuts in the State from various dealers was
allowed, upon satisfaction that the groundnuts has earlier suffered tax.
However, on the ground that some of the purchases on which exemption was
allowed originally were based on forged bills obtained from non-existent
dealers, the Deputy Commercial Tax Officer revised the assessment under
Section 16(1) of the T.N.G.S.T. Act and also levied penalty under section
16(2). On appeal, the dealers submitted statement showing the sellers’ names
and addresses, their registration certificate numbers, G.L. numbers, cess
permit numbers, bill numbers with dates, lorry freight paid and the relevant
day book pages were also filed. However, the Appellate Assistant Commissioner
upheld the Deputy Commercial Tax Officer’s order. He further held that there
was no evidence of movement of goods. The Appellate Assistant Commissioner
also held that there was no positive evidence that the goods had suffered tax
already in the hands of the sellers. On appeal, the Tribunal set aside the
reassessments, which were questioned before this Court by the revenue. While
taking into consideration of the facts of the case, this Court has held that
while making the original assessments, the assessing authority had examined
the relevant invoices, the cess permits and accounts and other relevant
records relating to the claim of exemption in respect of groundnut purchased
by the dealers and on being satisfied that the goods had earlier suffered tax,
rightly allowed the exemption. On the basis of the documents produced by the
dealers, the Tribunal came to the conclusion that the dealers had really moved
the goods in furtherance of the purchases effected by them. The revenue had
relied upon certain statements obtained from mill owners. Admittedly, at the
time of purchase by the dealers, the registration certificates of the sellers
were not cancelled. There was no explanation by the Revenue for not having
examined the alleged sellers. The Revenue without examining the sellers had
examined the mill owners who had no connection whatsoever with the purchases
made by the dealers. There was no evidence to show that the sellers were not
in existence. Further, there was proof to the effect that the groundnut
purchased by the dealers had already suffered tax in the hands of the sellers.
In those circumstances, it was held that simply because the dealers’ claim to
exemption was rejected by the Department, that did not mean the dealers have
suppressed anything. Under those factual circumstances, this Court held that
the Tribunal was right in holding that no penalty was exigible in any of the
dealers’ cases under Section 16(2) of the Act. The facts of the present case,
as narrated above, are at variance in almost all facts, in the sense, that the
registration certificate of the selling dealer has been cancelled with effect
from 28.8.1989. The petitioner is not able to produce any evidence for
payment of the sale price. There is absolutely no evidence whatsoever
forthcoming on the transportation of the goods from the place of selling
dealer to the place of the petitioner. None of the third parties’ statement
has been taken as the basis for revision. The revenue proved that the bills
produced by the petitioner are all issued by a bogus/non-existent dealer.
There is absolutely no evidence to prove that the goods has suffered tax at
the hands of the selling dealer. On the other hand, it has been proved by the
revenue that no tax was paid by the selling dealer. Hence,there are ocean of
difference on facts between the case relied on by the petitioner and the case
on hand and as such the case of Kuppusamy Gounder is not applicable to the
facts of the present case. The Courts should not place reliance on decisions
without discussing as to how the factual situation fits in with the fact
situation of the decision on which reliance is placed. Observations of Courts
are not to be read as Euclid’s theorems nor as provisions of the statute.
These observations must be read in the context in which they appear.
Judgments of courts are not to be construed as statutes. To interpre t words,
phrases and provisions of a statute, it may become necessary for judges to
embark into lengthy discussions but the discussion is meant to explain and not
to define Judges interpret statutes, they do not interpret judgments. They
interpret words of statutes, their words are not be interpreted as statutes.
(vide JT 2002 (1) SC 482 )
20. The other case relied on by the learned counsel for the
petitioner is KALRA GLUE FACTORYVS. SALES TAX TRIBUNAL AND OTHERS reported in
(1987) 66 STC 292, which is also a case in which on arriving at the conclusion
that the transaction entered into by the appellant firm was in the course of
inter-state trade, the sales tax Tribunal relied inter alia on a statement of
a partner of another firm, which has not been tested by cross examination. In
that factual situation, the Supreme Court set aside the order of the Sales Tax
Tribunal, and order in revision of the High Court therefrom and remitted back
the matter to the Tribunal. In that case, the Supreme Court allowed the
appeal solely on the ground that the statement of one Banke Lal, which was not
tested by cross examination was used in order to reach the conclusion that the
transaction was an inter-state sale, but the facts are not similar to that of
the present case, as stated above. No third party statement has been relied
upon for revising the assessment. Hence, that case is also not applicable to
the facts of the present case.
21. Mr.Thiyagarajan, the learned counsel lastly contended that there
is absolutely no finding by the authorities concerned that the assessee has
wilfully non-disclosed the assessable turnover. We are afraid to accept such
a contention, in the face of the factual findings as given by the authorities,
viz., the assessing Officer has given reason that the petitioner produced
bogus bills in the name of the non-existent dealer, who might perhaps be the
stooge of the assessee, since it is the assesses themselves, who have
benefited and the nonexistent dealer. Further, it was found on fact that no
payment has been made by the petitioner by way of cheque or demand draft when
the turnover is as huge as Rs.16 lakhs, and failed to establish the genuine
and bona fide nature of the transaction. The petitioner has also miserably
been failed to produce any iota of evidence for the transportation of the
goods from the place of purchase to the petitioner’s place and that the
intention is deliberate to avoid the payment of tax by showing it as a second
sale exemption. The first appellate authority also has given a finding to the
effect that the appellant with a dishonest intention to defraud the revenue
obtained bills to conceal his first sale as second sale.
22. The final fact finding authority, the Appellate Tribunal also in
its order has stated that during the assessment year 1989-90, M/s. Mathuram
Traders has not paid the sales tax for its alleged supply and the supply has
not suffered tax at the point of first sale. Therefore, we feel that the
appellant had not brought out any additional point for us to interfere with
the orders of the Appellate Assistant Commissioner. Before the revisional
authority, as already stated, no question of law has been raised. Hence,
there is absolutely no material for us to interfere with the levy of penalty
also.
23. For the reasons stated above, we are of the view that the orders
of the authorities below require no interference and the writ petition is
dismissed. However,there is no order as to costs. Consequently, the
connected W.M.P. is also dismissed.
Index:Yes
Website:Yes
usk
To
1. The Registrar,
Tamil Nadu Taxation Special
Tribunal, Rajaji Salai,
Chennai-1.
2. Deputy Commercial Tax Officer,
Washermenpet I Assessment Circle,
Chennai.