Electricals Vs. State of Tamil Nadu & ANR.  INSC 808 (21 April 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOs. 5134-5135 OF 2002 Sree
Krishna Electricals ...Appellant Versus State of Tamil Nadu & Anr.
Dr. ARIJIT PASAYAT,
in this appeal is to the judgment of a Division Bench of the Madras High Court
dismissing the writ petitions filed by the appellant. The appellant is a dealer
registered under the Tamilnadu General Sales Tax Act, 1959 (in short the
`Act'). The appellant was assessed to tax on the sale of wet grinders. Though
the appellant claimed that he was not selling wet grinder but only parts
thereon, the claim was found to be untrue and tax and penalty were imposed for
the Assessment years 1992-93 and 1993-94.
Appellant's stand was
that he was entitled to relief on the basis of a judgment of the High Court in
State of Tamil Nadu v. Suguna Agencies (1991) 81 SCC 33). According to the
Revenue authorities, the judgment was referred to in a later judgment of the
High Court in S. Durai v. Joint Commissioner of Commercial Taxes Chepauk,
Madras (1994) 95 STC 372 where a different view was taken.
these cases are cases in which similar claims were made that though the
assessee had purchased parts required to be put together to form wet grinder
whatsoever has been sold by the assessee was not wet grinder but parts thereof.
In the first case the High Court accepted the finding of the Tribunal that what
had been sold was the parts of the wet grinder. In the later case the High
Court found that the authorities had recorded a finding that what was sold was
in fact was a complete wet grinder which was a new commodity and not merely
High Court was of the view in the present case that the later decision apply to
the facts of the present case. As regards the penalty the assessee took the
stand that the penalty has been imposed mechanically and there was no warrant
for it as the assessee had disclosed the turnover for which he had claimed
exemption. The High Court was of view that there was not complete disclosure
and the fact that he had disclosed the sale of what he has termed as parts does
not amount to full disclosure. The assessments made in the case of the assessee
were in fact the best judgment assessment which permitted the imposition of
penalty. Accordingly the writ petitions were dismissed.
counsel for the appellant submitted that the High Court should have compared
the factual scenario and should have held that the decision in Suguna's case
(supra) is applicable to the facts of the case.
counsel for the respondent on the other hand supported the judgment of the High
find that the authorities have factually adjudicated the issues. In S. Durai's
case (supra) on which reliance was placed by the High Court to dismiss the writ
petitions is held that what was sold was in fact a complete wet grinder which
was a new commodity and not merely parts thereof. The High Court has observed
that the factual scenario was identical. The conclusions arrived at by the
revenue authorities and the High Court that in fact what was sold was a
complete wet grinder which was a new commodity and not merely parts thereof.
This being a factual finding, there is no scope for interference in these
appeals so far levy of tax is concerned.
far as the question of penalty is concerned the items which were not included
in the turnover were found incorporated in the appellant's accounts books.
Where certain items which are not included in the turnover are disclosed in the
dealer's own account books and the assessing authorities includes these items
in the dealers' turnover disallowing the exemption penalty cannot be imposed.
The penalty levied stands set aside.
appeals are accordingly disposed of.
(Dr. ARIJIT PASAYAT)