STATE OF TAMIL NADU Vs. TVL JAKTHI VELIYEETAKAM

JUDGEMENT

(1.) IN this case, the AO levied a penalty of Rs. 2, 201 under S. 12(3) of the Tamil Nadu General ST Act, 1959. On an appeal preferred by the assessee the AAC set aside the order of penalty. The assessee preferred an appeal to the Tribunal questioning the determination of the turnover itself. IN that appeal, the State filed a petition to restore the penalty levied by the AO and cancelled by the AAC. The Tribunal refused to restore the penalty. It is this order of the Tribunal concerning the penalty that is sought to be revised in this tax revision case filed under S. 38 of the Act.

(2.) WE are of the opinion that the so-called petition filed by the Revenue for restoration of the penalty was not competent and the Tribunal had no jurisdiction to restore the penalty. It is sub-b. (3) of S. 36 of the Act which deals with the scope of orders which the Tribunal may pass in an appeal preferred before it. That sub-section reads as follows :- "Sec. 36(3) : In disposing of an appeal, the Tribunal may, after giving the appellant a reasonable opportunity of being heard - (a) in the case of an order of assessment - (i) confirm, reduce enhance or annual the assessment or penalty or both (ii) set aside the assessment and direct the AO to make a fresh assessment after such further enquiry as may be directed, or (iii) pass such other orders as it may think fit or (b) in the case of any other order, confirm, cancel or vary such order." For the purpose of this case, we are assuming that the expression 'order of assessment' occurring in S. 36(3)(a) includes an order levying penalty because S. 36(4)(a)(i) refers to the penalty itself. With regard to the request of the State to the Tribunal to restore the penalty, we are of the opinion that none of the four words occurring in S. 36(3)(a)(i) namely, 'confirm, reduce enhance or annual' is capable of including a power to restore a penalty which has been set aside by the appellate authority. Obviously, the words 'confirm, reduce or annul' will have no relevancy to the request which the State has made to the Tribunal. The only expression that will be of any consequence is the word 'enhance.' For the word 'enhance' to apply, there must be something to be increased. In this case, since the AAC has set aside the very order of penalty, there was no penalty to be increased. To enhance the penalty already imposed is different from restoring the penalty which was imposed by the original authority but set aside by the AAC, since the subject-matter of the appeal before the Tribunal is the order of the appellate authority only and not the order of the original authority. Consequently, an application for restoration of the penalty in the present case will not come within the scope of S. 36(3)(a)(i) of the Act and therefore the Tribunal was right in not restoring the order of penalty though the reason given by the Tribunal for doing so are different. Hence the tax revision case is dismissed.