JAYA HILLS PRODUCE Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS appeal has been filed against the order of the Board of Revenue dated 29th November, 1975. The assessee reported a total and taxable turnover of Rs. 5, 38, 360. 72 for the assessment year 1964-65 under the Tamil Nadu General Sales Tax Act, 1959, in the annual return submitted on 31st May, 1965. There was an inspection of the assessee's business place on 11th September, 1964 , when nine bills disclosing sales to the extent of Rs. 97, 547. 23 were recovered. THIS turnover was not disclosed in the return. When the assessee's accounts were checked, the turnover was found to be Rs. 6, 35, 907. 95, which included the sum of Rs. 97, 547. 23. The assessing officer found that there were other suppressions and irregularities and he therefore rejected the returns as well as the accounts. He took the turnover as per the books and added Rs. 31, 795. 40, which represented 5 per cent of the turnover, as per the accounts, for "probable suppression" and made a best judgment assessment under section 12 (2) of the Act. He levied also a penalty of Rs. 7, 416 under section 12 (3) for the assessee's failure to disclose the turnover of Rs. 97, 547. 23 in the annual return.

(2.) AT the time of the inspection, there were certain sheets indicating suppression of purchase amounting to Rs. 65, 652. 85. Adding 10 per cent towards gross profit, the sales taken as suppressed worked out to Rs. 72, 217. 85. The sum was originally included in the assessment for 1963-64. On appeal by the assessee, the Sales Tax Appellate Tribunal held that the turnover related only to 1964-65 and not to 1963-64. Therefore, the assessing officer revised the assessment under section 16 (1) and included the said turnover of rs. 72, 217. 85 in the assessment for 1964-65 and levied also a penalty of Rs. 5, 415 under section 16 (2 ). The assessee appealed to the Appellate Assistant commissioner against the original and revised assessments, and the Appellate assistant Commissioner confirmed the original and the revised assessments.

(3.) THIS case was taken up on appeal to the Supreme Court and the judgment of the Supreme Court is reported as State of Madras v. Jayaraj nadar and Sons The Supreme Court affirmed the judgment of this Court. At page 702, their Lordships also observed : "where account books are accepted along with other records, there can be no ground for making a best judgment assessment. " * So, the result is that wherever books of account are accepted as such, there is no question of any levy of penalty under section 12 (3) and, therefore, we consider that the levy of penalty is not called for. No doubt, there is another sum of Rs. 31, 795. 40 added in the assessment. However, the authorities did not consider that addition as a justification for levy of penalty. We do not think it proper to go into that item for considering the question of penalty. Coming to the levy of penalty under section 16, the position is as follows. The assessee did not include the relevant amount either in the return for 1963-64 or for 1964-65. It is true that when the matter was pending on appeal before the Tribunal for the assessment year 1963-64, it was stated by the assessee that this amount was liable to be assessed only in 1964-65 as the dates of the transactions themselves showed. It was only on this basis that the Tribunal directed that the relevant amount could be assessed in 1964-65. As the non-disclosure in the present case cannot be taken to be other than wilful, the levy of penalty under section 16 cannot be said to be bad.