STEEL SALES ORGANISATION Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE assessee is in appeal against the order passed by the Joint Commissioner on May 6, 1982, in exercise of his suo motu powers of revision under section34 of the Tamil Nadu General Sales Tax Act, 1959, hereinafter called "the Act". Since the controversy in the appeal relates only to levy of penalty under section22(2) of the Act, we are relieved of the necessity to deal with the facts of the case in detail.

(2.) THE assessee was subjected to penalty of Rs. 26, 785 by the assessing authority under section22(2) of the Act for collection of sales tax in contravention of the provisions of the Act and the Rules made thereunder during the assessment year 1975-76. On appeal, the Appellate Assistant Commissioner deleted the entire penalty. THE Joint Commissioner examined the order of the Appellate Assistant Commissioner with the relevant record and proposed to revise that order. A notice was issued to the assessee, and after inviting his objections to the proposal and hearing the assessee, the Joint Commissioner set aside the order of the Appellate Assistant Commissioner and restored that of the assessing authority.

(3.) SECTION 22(1) of the Act provides that no person who is not a dealer shall collect any amount by way of tax or purporting to be by way of tax under the Act and that no registered dealer shall make any such collection except in accordance with the provisions of the Act and the Rules made thereunder. Sub-section (2) of section 22 mandates that if any person or registered dealer, as the case may be, collects any amount by way of tax or purporting to be by way of tax in contravention of the provision of sub-section (1) the assessing authority may, after giving the party concerned a reasonable opportunity of being heard, by an order in writing impose, upon him by way of penalty a sum not exceeding one and a half times of such amount. It is not disputed before us that what was collected by the assessee as 'sales tax recoupment" was not authorised by the Act or the Rules framed thereunder. The assessee had, therefore, undoubtedly contravened the provisions of section22(1) of the Act by collecting an amount "purporting" to be by way of tax. The material on record, therefore justifies the finding arrived at by the Joint Commissioner that the assessee contravened section 22(1) of the Act and rendered himself liable for penalty under section22 of the Act.