K. Raviraja Pandian, J.@mdashThis is an appeal filed against the order of the Joint Commissioner (Commercial Taxes) suo motu revision, Office
of the Special Commissioner and Commissioner of Commercial Taxes, Chepauk, Chennai- 5 dated 22.6.1999 and passed in S.M.R. No. 619 of
1998, whereby the Joint Commissioner levied penalty u/s 12(3) of the Tamilnadu General Sales Tax Act in respect of assessment made u/s 12(2).
2. For the assessment year 1993-94, the petitioner was assessed to tax on a taxable turnover of Rs. 2,33,063/- under T.N.G.S.T. Act. The books
of accounts of the appellant were verified and accepted by the assessing officer, however levied penalty in a sum of Rs. 20,976/- u/s 12(3)(A) of
the Act on the tax, surcharge and additional surcharge due of the taxable turnover of Rs. 2,33,063/- which has not been declared to the
Department. The appellant preferred an appeal before the Appellate Assistant Commissioner, who, while confirming the levy of tax, deleted the
penalty on the premise that the turnover reflected in the books of accounts has been accepted by the assessing officer and there was no best
judgment assessment. The Joint Commissioner by exercising power u/s 34 of the Act has taken up the matter suo motu and set aside the order of
the Appellate Assistant Commissioner in respect of deletion of the levy of penalty and restored the order of assessment. The correctness of the
same is now put in issue in this appeal before us.
3. We have heard the argument of the learned Counsel on either side and perused the materials on record.
4. Learned Counsel appearing on either side on consensus submitted that the issue involved in this appeal is covered by a Division Bench judgment
of this Court in the case of Appollo Saline Pharmaceuticals (P) Ltd. v. Commercial Tax Officer (FAC) and Ors. reported in (2002) 125 STC 505,
wherein it was held thus:
...7. Though other Sub-sections of Section 12 were amended by the State Legislature subsequent to the date of the judgment in the case of The
State of Madras Vs. S.G. Jayaraj Nadar and Sons, , Sections 12(1) and 12(2) have remained in the same form. The legislative intention therefore,
except during the period December 3, 1979 to May 27, 1993 and on and after April 1, 1996 must be taken to be to, permit the levy of penalty
only in case where the assessment is a best judgement 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 u/s 12(3).
8. The assessments for the assessment years 1993-94 and 1994-95 which were assessments made on the basis of the accounts, and not based on
any other material and were not estimates, have therefore, to be regarded as assessments made u/s 12(1) to which the penal provisions of Section
12(3) are not attracted. The levy of penalty for those two assessment years is set aside....
5. In the light of the above judgment, the order of the Joint Commissioner restoring the penalty cannot be legally sustainable and it has to be set
aside and the same is set aside and the appeal is allowed.