YUVARAJ MERCH-X Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner is engaged in the business of purchase and sale of scientific equipment, conversion of cotton hosiery yarn into cloth upon receiving knitting charges and also manufacturing hosiery garments by paying stitching charges for export. They are registered as dealers on the file of the respondent under the provisions of both the Tamil Nadu General Sales Tax Act, 1959 and Central Sales Tax Act, 1956. That apart, the petitioner is a sales agent of Pailung Machinery Mill Co. Ltd., Taipei, Taiwan, who is a manufacturer of textile machines, parts and accessories and an agent of Paramount Scientific Instrument Co. Ltd., who is a manufacturer of scientific instruments. Originally, the respondent has assessed the tax for the assessment year 2003-04 and determined a total and taxable turnover of Rs. 51,22,919 by accepting the returns filed by the petitioner.

(2.) Thereafter, the enforcement wing officials conducted an inspection on September 15, 2004 in petitioner's business place and found that they have paid only sales tax at four per cent on the sale of imported machinery spares, which actually attracts sales at 20 per cent. The petitioner admitted the defect and agreed to pay the difference due thereon. Further, the inspecting officials enquired about the nature of business activities being carried on by the petitioner and also obtained a sworn statement in this regard. Subsequently, the petitioner was shocked to receive a revision notice dated February 14, 2007 from the respondent, proposing to revise the assessment for the year 2003-04, based on the D3 proposals submitted by the enforcement wing officials, alleging that the enforcement wing officials had found the managing partner of the petitioner has announced in "The Hindu" newspaper dated December 6, 2004, that they have sold 110 numbers of knitting machines during 2003-04. But actually, the petitioner had acted as an agent for commission, in respect of selling of 110 numbers of knitting machines.

(3.) The petitioner has further submitted that based on the news item, the respondent has proposed to revise the assessment under Section 16 of the TNGST Act and issued the impugned show-cause notice dated February 14, 2007, which contained following defects and omissions: