VIJAYA WINES Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS tax revision case is directed against the order of the Sales Tax Appellant Tribunal, dismissing Tribunal Appeal No. 730 of 1974 preferred by the revision-petitioner. Mr. P. Venkatarama Reddy, the learned counsel appearing for the petitioner, contended that penalty proceedings are quasi-criminal in nature, and the Appellate Tribunal has failed to bear in mind the principles laid down by the Supreme Court in Hindustan Steel Ltd. v. State of Orissa ([1970] 25 S. T. C. 211 (S. C. ).) in the matter of levying penalty. It is his case that the sales in respect of which addition has been made by the assessing authority are second sales and that there was no enquiry by the assessing authority to ascertain whether the sales are not second sales.

(2.) THE relevant facts necessary for appreciating the points raised in this revision are these : The petitioner is M/s. Vijaya Wines, Kothapet, Tenali. During the assessment year 1972-73, the firm reported a gross turnover of Rs. 1,61,379. 65 and claimed exemption on the entire turnover. The business premises of the petitioner was inspected by the officers of the Commercial Tax Department on 22nd August, 1972, which led to the recovery of duplicate set of accounts for the period 27th July, 1972, to 21st August, 1972. They also recovered slips of transactions covering the period 27th July, 1972, to 21st August, 1972. Soon after inspection, the petitioner reported closure of its business on 13th September, 1972. The assessing authority checked the accounts for that year and, on the basis of the material gathered by the officers of the department at the inspection, added a turnover of Rs. 71,089. 86 as suppression of sales of liquors. On the ground that the petitioner did not prove that it was a second dealer in respect of the liquor transactions, the assessing authority treated the transactions as first sales within the State and subjected the sales to tax at the appropriate rates. The assessment orders were confirmed, on appeal, both by the Assistant commissioner as well as by the Appellate Tribunal. The assessing authority issued a notice dated 6th December, 1973, to the petitioner to show cause why the turnover disclosed in the second set of account books and slips of papers should not be subjected to tax under section 14 (1) and why, for the reasons stated in the notice, a penalty of Rs. 78,755. 25 being five times of the tax due on the estimated suppressed turnover, be not levied. The petitioner filed its objections and, rejecting the objections raised by the petitioner, the assessing authority levied penalty as proposed in the notice. That led the petitioner to prefer an appeal before the Assistant Commissioner, Commercial Taxes, and he reduced the penalty equal to the tax assessed by the assessing authority on the ground that it would amply meet the ends of justice. The net result was the penalty of Rs. 78,755. 25 was reduced to Rs. 12,658. 49. The petitioner then preferred an appeal and that appeal was dismissed by the Appellate Tribunal. Hence this revision.

(3.) MR . Venkatarama Reddy, appearing for the petitioner, seeks to construe the words "on the turnover that was not disclosed" as "on the turnover liable to tax". According to him, sub-section (2) of section 14 is attracted only where taxable turnover is not disclosed by the dealer and not otherwise. According to Mr. Sastry, to construe the words "on the turnover" as meaning "on the turnover taxable" would be introducing the word "taxable" which the legislature has not chosen to insert after the word "turnover".