STATE OF TAMIL NADU Vs. A L FRANCIS

JUDGEMENT

(1.) THE assessee is running a hotel. He had not registered himself as a dealer till his place of business was inspected on 2nd June, 1972. THE assessing authority checked the accounts and found that they were not correctly maintained. THE hotel itself had been started on 22nd November, 1971. We are in the present revision dealing with the assessment year 1971-72. THErefore, the turnover between 22nd November, 1971, and 31st March, 1972, is relevant for consideration. THE assessing authority fixed the turnover for that period at Rs. 46, 986. 55 and in addition levied a penalty of Rs. 1, 515. On appeal, the Appellate Assistant Commissioner while confirming the assessment reduced the penalty to Rs. 909. THEreafter, there was an appeal to the Sales tax Appellate Tribunal. Three contentions was taken before the Tribunal. THE first was that the addition to the book turnover was not proper. THE Tribunal went into this question and found that the defects pointed out by the assessing authority existed so that the addition was liable to be made. THE second contention taken before the Tribunal was that the assessee was eligible to be assessed at the compounded rate of tax under section 7. For this purpose, we have to set out a few more facts.

(2.) THE assessee had not filed the return for the assessment year 1971-72. However, he submitted a return for 1972-73 on 6th June, 1972, and in the said return exercised the opinion for being assessed under section 7. THE assessment for 1972-73 was completed on 13th June, 1972. THE assessing authority levied tax on the assessee in accordance with the provisions of section 7. However, while assessing for the assessment year 1971-72, the benefit of section 7 was not given and the objection of the assessee before the appellate Assistant Commissioner to the denial of the benefit of section 7 was not successful. THE contention that was before the Tribunal was that as the assessment for 1972-73 had been completed on 13th June, 1972, any assessment that was completed subsequent to that date would have to carry the benefit of the provisions of section 7. It is this contention which found favour with the tribunal. THE assessee challenged also the levy of penalty. THE Tribunal held that this being an assessment without the assessee filing the return, the assessment could only be treated as one under section 16 and that under the provisions of section 16 the levy of penalty has to be preceded by a finding that there was a wilful non-disclosure of turnover and that in this case there was no such finding. In this view, the entire penalty was cancelled. THE State of Tamil Nadu has come forward with the present revision petitioner challenging the order of the Sales Tax Appellate Tribunal.