S MEENAKSHI Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS batch of tax revision cases under section 38 of the tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as the Act, arises out of a common order of the Tamil Nadu Sales Tax Appellate Tribunal, additional Bench, Madurai, dated 6th October, 1971. The petitioners in all these cases were paying tax in terms of section 7 of the Act. After their assessments were completed with reference to that section and the taxes payable by them were determined, it came to notice that certain transactions which the respective petitioners had, had not been brought to account and, therefore, had escaped assessment to tax. Consequently, the assessments were reopended under section 16 of the Act and the turnover redetermined and on the basis of the turnover so determined in each case the tax was demanded from the petitioners. Simultaneously, penalty was levied under section 16 (2) of the Act. The appeals preferred by the petitioners to the Appellate Assistant Commissioner, commercial Taxes, and the Sales Tax Appellate Tribunal failed except with regard to the quantum of penalty. Hence the present revision petitions by the assessees. Before we refer to the arguments advanced before us, it is necessary to refer to certain provisions of the Act. Section 2 (p), (q) and (r) define "taxable turnover", "total turnover"and" turnover"as follows : " 2. (p)'taxable turnover'means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed; (q)'total turnover'means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax; (r)'turnover'means the aggregate amount for which goods are bought or sold, or supplied or distributed, by a dealer either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, other than tea, grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover; Explanation (1 ).-'agricultural or horticultural produce'shall not include such produce as has been subjected to any physical, chemical or other process for being made fit for consumption, save mere cleaning, grading, sorting or drying; Explanation (2 ).- Subject to such conditions and restrictions, if any, as may be prescribed in this behalf - (ii) the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of, or before the delivery thereof; (iii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; and (iv) where for accommodating a particular customer, a dealer obtains goods from another dealer and immediately disposes of the same to the said customer, the sale in respect of such goods shall be included in the turnover of the latter dealer but not in that of the former. " * Section 3 (1) is the charging section and that section, so far as is relevant and as was in force on the relevant date, was as follows : "every dealer (other than a causal trader or agent of a non-resident dealer) whose total turnover for a year is not less than fifteen thousand rupees and every casual trader or agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax for each year at the rate of three per cent of his taxable turnover. " * The provisos to this sub-section are not relevant for the purpose of these cases. Section 7 (1) of the Act is : "notwithstanding anything contained in sub-section (1) of section 3, every dealer whose total turnover is not less than fifteen thousand rupees but not more than seventy-five thousand rupees may at his option instead of paying the tax in accordance with the provisions of that sub-section, pay tax at the following rates, namely :. . . . . . . . " * Thereafter occur different slabs ranging between fifteen thousand rupees and seventy-five thousand rupees and for each slab the tax is fixed as a lump sum. For instance, the first slab is, where the total turnover is not less than fifteen thousand rupees, but is less than twenty thousand rupees and the tax payable by the dealer is Rs. 180 per annum. The second slab is whether the total turnover is not less than twenty thousand rupees, but is less than twenty-five thousand rupees, and the tax payable by the dealer is rupees two hundred and sixty per annum. The last slab is, where the total turnover is not less than seventy thousand rupees, but is not more than seventy-five thousand rupees and the tax payable by the dealer is rupees one thousand one hundred and ninety per annum. Thus, the provisions of section 7 (1)will clearly indicate two things : One is, it does not refer to taxable turnover, but takes note of only total turnover. Secondly, the tax is not fixed at a particular percentage on the turnover, but at a lump sum referable to a particular slab. Sub-section (2) of section 7 is : "any dealer who estimates his total turnover for a year to be not more than seventy-five thousand rupees may apply to the assessing authority to be permitted to pay the tax under this section and on being so permitted he shall pay the tax due in advance during the year in monthly or prescribed instalments and for that purpose shall submit such returns in such manner as may be prescribed. " *

(2.) ACCORDING to sub-section (3) of section 7, the tax paid under sub-section (2) shall be subject to such adjustment as may be prescribed on the completion of final assessment in the manner prescribed. The only other statutory provision, which has to be noticed is section 16 of the Act. Clause (a) of sub-section (1) of section 16 of the Act says : "where for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, the assessing authority may, subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax relates, determine to the best of its judgment the turnover, which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment. " * Clause (b) of sub-section (1) of section 16 relates to a case where the turnover of a dealer has been originally assessed at a rate lower than the rate at which it should be assessed and it is not relevant for the purpose of this case. Sub-section (2) of section 16 of the Act enables the assessing authority, while he reassesses under sub-section (1) of that section, to levy a penalty. It is under the provision of section 16 that action was taken in the case of the respective petitioners. The nature of the action taken can now be indicated in the form of a tabular statement, as has been done by the Tribunal itself in its order, and it is as follows : ------------ T. C. M. T. A. Year of Turnover originally No. No. assessment determined 26/72 146/71 1968-69 56, 806. 00 (under section 7) 27/72 149/71 1968-69 58, 135. 00 (under section 7)28/72 255/71 1967-68 60, 827. 30 (under section 7) 29/72 280/71 1968-69 60, 827. 00 (under section 7) ------------ Turnover assessed Turnover actually added penalty levied under section 16 to the original assessment and sustained now (escaped turnover) under dispute 90, 617 33, 811. 00 1, 521 at 3 per cent 80, 905. 00 22, 770. 00 1, 024 at 3 per cent 79, 897. 30 19, 070. 00 855 at 3 per cent 92, 252. 00 31, 052. 00 1, 395 (91, 879 at (multi-point 3 per cent; goods 373. 373 at 5 1/2 Single point per cent) goods chicory) Thus, it will be seen that what has been done in this case is to find out the turnover suppressed by the assessees and add that turnover to the original turnover fixed by the assessing authority and determine the tax payable on the turnover so determined and demand the tax after giving credit for the tax already paid under section 7 of the Act.