STATE OF TAMIL NADU Vs. GANESH AND COMPANY

JUDGEMENT

(1.) THE State is the petitioner herein. According to the facts arising in this case, a deed of partnership was made on November 26, 1980, between five partners. According to which the firm was to carry on the business as dealers in colour films production and distribution of motion pictures and with the consent of all the partners to carry on any other business also. THE profits and loss were to he shared equally. THE partnership effected a single transaction of purchasing photograph films from India Photographic Company as can be seen from debit notes 237, 238 dated June 17, 1981 which was sold in a single transaction by invoice No. 1 dated August 4, 1981. One of the partner's house was inspected by the Enforcement Wing on October 29, 1981. THE partner one M. Ganesan admitted in the statement on October 29, 1981 that there was a single sale transaction and that the sales tax was collected. An application form for registration was submitted and the Enforcement Wing Officers obtained two cheques towards taxes and registration fees due on the spot. On the basis of this investigation assessment was made on January 31, 1983. THE total turnover was determined as Rs. 2, 02, 400. This is the amount which was accepted before the Enforcement officers by the partner of the firm. THE assessee has collected sales tax on August 4, 1981, at the time of sale. THE assessee was not a registered dealer. THErefore, the assessing officer levied maximum penalty of Rs. 50, 094 under section22(2) of the Act. Another penalty was levied under section12(3) of the Act to the extent of Rs. 50, 094. On appeal, the Appellate Assistant Commissioner confirmed the penalty levied by the assessing officer under section12(3) and under section22(2) of the Act. Aggrieved, the assessee filed an appeal before the Appellate Tribunal. THE assessee did not contest the appeal with regard to the assessment. But appeal was argued only for the cancellation of the penalties levied under section 12(3) and section22(2) of the Act. THE Appellate Tribunal deleted penalty under section22(2) of the Act holding that the effect a obtaining registration fee and the application for registration at the time of inspection on October 29, 1981, would go to show that the assessee became a registered dealer from the date of commencement of the business following the 1983 (52) STC 235 [State of Tamil Nadu v. Nava Bharath Enterprises (P.) Ltd.]. THE Tribunal also deleted the penalty levied under section12(3) of the Act holding that there was no wilful failure to file the return as required under section12(3) of the Act since the Revenue had collected the tax from the assessee on October 29, 1981 itself that is even prior to May 1, 1982.

(2.) IT is against this order the department is in revision before this Court. The learned Additional Government pleader (Taxes) submitted that the Tribunal was not correct in deleting the penalty levied under section12(3) as well as under section22(2) of the Act. IT was submitted that for the purpose of levying penalty under section12(3) of the Act, it is not necessary to consider whether there is any element of wilfulness in not filing the return in time. In the case of levying of penalty under section22(2) of the Act it was submitted that the application for registration was filed beyond 30 days from the date of commencement of the business and therefore the non-issuance of the certificate by the department would not authorise the assessee to contend that the deemed certificate would operate from the date of the commencement of the business. For these reasons it was submitted that the penalties are exigible under section12(3) and section22(2) of the Act.

(3.) WE have heard the learned counsel appearing on both sides. WE have also gone through the relevant rules necessary for deciding the issues arising in this case.