P MANICKAM CHETTIAR Vs. GOVERNMENT OF MADRAS

JUDGEMENT

(1.) THE assessee in this case is generally a dealer in arecanuts and spices. He was originally assessed by the assessing authority on a taxable turnover of Rs. 51, 493. 98 by an order dated 23rd June, 1962. Later, the said order of assessment was revised by the same authority under section 16 (1) of the Tamil Nadu General Sales Tax Act on the basis of the information and materials gathered from the customs department which showed that the assessee had purchased various items including arecanuts at the auction sales held by them and that these sales had not been brought into the regular accounts of the assessee. In reply to the notice issued by the assessing authority proposing to revise the assessment under section 16 (1), the assessee contended that he bought the goods at the auction held by the customs department to accommodate one Mr. Gopalan and in support of that case he also produced an affidavit from him to that effect. THE assessing authority did not accept this plea of the assessee. On the basis of the information available from the customs department showing that it was the assessee who had purchased the goods from the department and not the said Mr. Gopalan, the assessing authority proceeded to revise the original assessment by including a sum of Rs. 84, 730. 05 to the turnover already determined by him in the original assessment.

(2.) THE revised order of the assessing authority was challenged by the assessee before the Appellate Assistant Commissioner, who, by his order dated 6th March, 1964, deleted two turnovers, namely, (1) Rs. 43, 255 and (2) Rs. 19, 772, from the taxable turnover as revised by the assessing authority. As regards the sum of Rs. 19, 772, the reason given by the Appellate assistant Commissioner is that the assessee is a second seller and, therefore, he is not liable to pay the tax. THE Appellate Assistant Commissioner also reduced the penalty to Rs. 750. THE order of the Appellate Assistant commissioner came to be revised by the Board of Revenue in exercise of its suo motu power under section 34 of the Act. THE Board of Revenue felt that the appellate authority was not justified in excluding the turnover of Rs. 19, 772 on the ground that the customs department is the first seller of the goods and that, therefore, the assessee being a second seller cannot be taxed. According to the Board of Revenue, the assessee has not established by producing necessary documents that the customs department has collected sales tax on the assessee's transactions of purchase. In that view, the Board of Revenue added back the turnover of Rs. 19, 464. 50 in the taxable turnover. THE Board of revenue also levied a penalty of 1 1/2 times the tax due on the enhanced turnover of Rs. 19, 464. 50, in addition to the penalty fixed by the Appellate assistant Commissioner. THE said order of the Board of Revenue is being challenged in this appeal.