HOTEL ARCHANA Vs. CHAIRMAN, TNSTAT

JUDGEMENT

(1.) THE writ petition is filed for the issuance of a writ of certiorari to call for the records on the file of the first respondent herein in STA. No. 154 of 2000 dated November 30, 2001 and quash the same as illegal and unlawful insofar as the levy of penalty is concerned.

(2.) THE petitioners are running a hotel and were finally assessed by the third respondent for the assessment year 1994 -95. During the check of the petitioners' account, the assessing officer has found a difference of Rs. 98,031 in the turnover reported and that as per the accounts. The petitioner claimed gross profit at 66 per cent. Apart from that, the assessing officer found that the petitioner has not maintained accounts for the purchase of milk, vegetables, firewood and rice. The assessing officer conducted a survey on May 18, 1994 and determined the turnover on the basis of the sales on that day. He further added 20 per cent amounting to Rs. 3,14,620 towards the probable omission and levied penalty in a sum of Rs. 82,926 under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959.

(3.) THE issue as to levy of penalty in the absence of any substantial provision of the Act has been considered by the court during the relevant period of time and it has been found that there is no substantial provision available for levy of penalty and surcharge, additional sales tax. The learned Counsel for the petitioner relied on the ruling of a Division Bench of this Court in Karthik Roller Flour Mills Pvt. Ltd. v. State of Tamil Nadu Writ Petition Nos. 6777 and 6778 of 2001 dated August 14, 2002 wherein this Court after pointing out the subsequent ruling of the Supreme Court in the case of J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 and in the case of India Carbon Ltd. v. State of Assam [1997] 106 STC 460 held that no penalty can be levied on additional tax during the period in dispute. The same principle would equally apply in respect of levy of surcharge, additional surcharge and additional sales tax. It was so held in the decision reported in [2004] 136 STC 606 in the case of S.P.G. Ramasamy Nadar & Sons v. Commercial Tax Officer, Madras. In the light of the abovesaid ruling, the levy of penalty in respect of surcharge, additional surcharge and additional sales tax cannot be legally sustained. To that extent the order of the Tribunal is modified and the levy of penalty on surcharge, additional surcharge and additional sales tax are set aside.