STATE OF TAMILNADU Vs. UPTRON INDIA LIMITED

JUDGEMENT

(1.) BY formulating the following substantial questions of law :

(2.) THE minimum facts required for the disposal of the revision are as follows : During the checking of accounts of the assessee, which is a dealer in electronic goods, the Assessing Officer found that the assessee had collected tax on electronic goods at 15% instead of 10% over a turnover of Rs.3,78,951.65 Ps. THE excess collection of tax so made was quantified to Rs.20,842/- and the Assessing Officer, by invoking his power under Section 22(2) of the Act, levied penalty at one and half times of the excess collection, which is quantified at Rs.31,263/-. On appeal at the instance of the assessee, the First Appellate Authority reduced the penalty to 50% of the excess collection, which is quantified to Rs.10,421/-. Before the Tribunal, the assessee filed an appeal. In turn, the Department filed an enhancement petition to restore the penalty imposed by the Assessing Officer. THE Tribunal, after hearing the appeal and enhancement petition, found that there was no illegal retention of the amount by the assessee and that the collection of the tax at the rate of 15% was paid over to the Government. On the above said reasoning, the Tribunal has come to the conclusion that the penalty is unwarranted under Section 22(2) of the Act. By holding so, the Tribunal dismissed the enhancement petition filed by the Department. As the relief has been granted in favour of the assessee, the Department is on further revision before this Court against the order of the Tribunal.

(3.) SECTION 22(2) of the Act provides that if any person or registered dealer collects any amount by way of tax or purporting to be by way of tax in contravention of the provisions of Sub.SECTION (1), whether or not any tax is due from such person or dealer under this Act in respect of the transaction in which he collects such amount, the Assessing Authority may, after giving such person or dealer a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty a sum which shall be (i) where the excess amount collected in the bonafide belief that it had to be collected 100% of the amount collected and (ii) where the excess amount has been collected willfully and knowing that it was not due to be collected 150% of the amount collected.